§ 26-1-4.1-210 — Rejection of payment order

Indiana § 26-1-4.1-210

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 4.1: Fund Transfers

Text

(a) A payment order is rejected by the
receiving bank by a notice of rejection transmitted to the sender orally
or in a record. A notice of rejection need not use any particular words
and is sufficient if it indicates that the receiving bank is rejecting the
order or will not execute or pay the order. Rejection is effective when
the notice is given if transmission is by a means that is reasonable in
the circumstances. If notice of rejection is given by a means that is not
reasonable, rejection is effective when the notice is received. If an
agreement of the sender and receiving bank establishes the means to be
used to reject a payment order, (i) any means complying with the
agreement is reasonable and (ii) any means not complying is not
reasonable unless no significant delay in receipt of the notice resulted
from the use of the noncomplying means.
(b) This subsection applies if a receiving bank other than the
beneficiary's bank fails to execute a payment order despite the
existence on the execution date of a withdrawable credit balance in an
authorized account of the sender sufficient to cover the order. If the
sender does not receive notice of rejection of the order on the execution
date and the authorized account of the sender does not bear interest, the
bank is obliged to pay interest to the sender on the amount of the order
for the number of days elapsing after the execution date to the earlier
of the day the order is canceled pursuant to IC 26-1-4.1-211(d) or the
day the sender receives notice or learns that the order was not executed,
counting the final day of the period as an elapsed day. If the
withdrawable credit balance during that period falls below the amount
of the order, the amount of interest is reduced accordingly.
(c) If a receiving bank suspends payments, all unaccepted payment
orders issued to it are deemed rejected at the time the bank suspends
payments.
(d) Acceptance of a payment order precludes a later rejection of the
order. Rejection of a payment order precludes a later acceptance of the
order.

Legislative History

As added by P.L.189-1991, SEC.4. Amended by P.L.199-2023, SEC.28.