Indiana § 26-1-4.1-406 Payment by originator to beneficiary; discharge of underlying
obligation

Indiana Statutes

§ 26-1-4.1-406 — Payment by originator to beneficiary; discharge of underlying obligation

Indiana § 26-1-4.1-406

Title 26COMMERCIAL LAW

Art. 1UNIFORM COMMERCIAL CODE

Ch. 4.1Fund Transfers

This text of Indiana § 26-1-4.1-406 (Payment by originator to beneficiary; discharge of underlying obligation) is published on Counsel Stack Legal Research, covering Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ind. Code § 26-1-4.1-406 (2026).

Text

(a)Subject to IC 26-1-4.1-211(e), IC 26-1-4.1-405(d), and IC 26-1-4.1-405(e), the originator of a funds transfer pays the beneficiary of the originator's payment order (i) at the time a payment order for the benefit of the beneficiary is accepted by the beneficiary's bank in the funds transfer and (ii) in an amount equal to the amount of the order accepted by the beneficiary's bank, but not more than the amount of the originator's order.

(b)If payment under subsection (a) is made to satisfy an obligation, the obligation is discharged to the same extent discharge would result from payment to the beneficiary of the same amount in money, unless

(i)the payment under subsection (a) was made by a means prohibited by the contract of the beneficiary with respect to the obligation, (ii) the bene

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(a) Subject to IC 26-1-4.1-211(e), IC 26-1-4.1-405(d), and IC 26-1-4.1-405(e), the originator of a funds
transfer pays the beneficiary of the originator's payment order (i) at the
time a payment order for the benefit of the beneficiary is accepted by
the beneficiary's bank in the funds transfer and (ii) in an amount equal
to the amount of the order accepted by the beneficiary's bank, but not
more than the amount of the originator's order.
(b) If payment under subsection (a) is made to satisfy an obligation,
the obligation is discharged to the same extent discharge would result
from payment to the beneficiary of the same amount in money, unless
(i) the payment under subsection (a) was made by a means prohibited
by the contract of the beneficiary with respect to the obligation, (ii) the
beneficiary, within a reasonable time after receiving notice of receipt
of the order by the beneficiary's bank, notified the originator of the
beneficiary's refusal of the payment, (iii) funds with respect to the order
were not withdrawn by the beneficiary or applied to a debt of the
beneficiary, and (iv) the beneficiary would suffer a loss that could
reasonably have been avoided if payment had been made by a means
complying with the contract. If payment by the originator does not
result in discharge under this section, the originator is subrogated to the
rights of the beneficiary to receive payment from the beneficiary's bank
under IC 26-1-4.1-404(a).
(c) For the purpose of determining whether discharge of an
obligation occurs under subsection (b), if the beneficiary's bank accepts
a payment order in an amount equal to the amount of the originator's
payment order less charges of one or more receiving banks in the funds
transfer, payment to the beneficiary is deemed to be in the amount of
the originator's order unless upon demand by the beneficiary the
originator does not pay the beneficiary the amount of the deducted
charges.
(d) Rights of the originator or of the beneficiary of a funds transfer
under this section may be varied only by agreement of the originator
and the beneficiary.