§ 26-1-4.1-303 — Erroneous execution of payment order

Indiana § 26-1-4.1-303

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

Text

(a) A receiving bank that (i) executes the
payment order of the sender by issuing a payment order in an amount
greater than the amount of the sender's order, or (ii) issues a payment
order in execution of the sender's order and then issues a duplicate
order, is entitled to payment of the amount of the sender's order under
IC 26-1-4.1-402(c) if that subsection is otherwise satisfied. The bank
is entitled to recover from the beneficiary of the erroneous order the
excess payment received to the extent allowed by the law governing
mistake and restitution.
(b) A receiving bank that executes the payment order of the sender
by issuing a payment order in an amount less than the amount of the
sender's order is entitled to payment of the amount of the sender's order
under IC 26-1-4.1-402(c) if (i) that subsection is otherwise satisfied
and (ii) the bank corrects its mistake by issuing an additional payment
order for the benefit of the beneficiary of the sender's order. If the error
is not corrected, the issuer of the erroneous order is entitled to receive
or retain payment from the sender of the order it accepted only to the
extent of the amount of the erroneous order. This subsection does not
apply if the receiving bank executes the sender's payment order by
issuing a payment order in an amount less than the amount of the
sender's order for the purpose of obtaining payment of its charges for
services and expenses pursuant to instruction of the sender.
(c) If a receiving bank executes the payment order of the sender by
issuing a payment order to a beneficiary different from the beneficiary
of the sender's order and the funds transfer is completed on the basis of
that error, the sender of the payment order that was erroneously
executed and all previous senders in the funds transfer are not obliged
to pay the payment orders they issued. The issuer of the erroneous
order is entitled to recover from the beneficiary of the order the
payment received to the extent allowed by the law governing mistake
and restitution.

Legislative History

As added by P.L.189-1991, SEC.4.