§ 10:4A-207 — Misdescription of beneficiary

Louisiana § 10:4A-207

• Jurisdiction: Louisiana
• Title 10: Commercial Laws

Text

§4A-207. Misdescription of beneficiary
(a) Subject to Subsection (b), if, in a payment order received by the beneficiary's
bank, the name, bank account number, or other identification of the beneficiary refers to a
nonexistent or unidentifiable person or account, no person has rights as a beneficiary of the
order and acceptance of the order cannot occur.
(b) If a payment order received by the beneficiary's bank identifies the beneficiary
both by name and by an identifying or bank account number and the name and number
identify different persons, the following rules apply:
(1) Except as otherwise provided in Subsection (c), if the beneficiary's bank does not
know that the name and number refer to different persons, it may rely on the number as the
proper identification of the beneficiary of the order. The beneficiary's bank need not
determine whether the name and number refer to the same person.
(2) If the beneficiary's bank pays the person identified by name or knows that the
name and number identify different persons, no person has rights as beneficiary except the
person paid by the beneficiary's bank if that person was entitled to receive payment from the
originator of the funds transfer. If no person has rights as beneficiary, acceptance of the
order cannot occur.
(c) If (i) a payment order described in Subsection (b) of this Section is accepted, (ii)
the originator's payment order described the beneficiary inconsistently by name and number,
and (iii) the beneficiary's bank pays the person identified by number as permitted by
Subsection (b)(1) of this Section, the following rules apply:
(1) If the originator is a bank, the originator is obliged to pay its order.
(2) If the originator is not a bank and proves that the person identified by number
was not entitled to receive payment from the originator, the originator is not obliged to pay
its order unless the originator's bank proves that the originator, before acceptance of the
originator's order, had notice that payment of a payment order issued by the originator might
be made by the beneficiary's bank on the basis of an identifying or bank account number even
if it identifies a person different from the named beneficiary. Proof of notice may be made
by any admissible evidence. The originator's bank satisfies the burden of proof if it proves
that the originator, before the payment order was accepted, signed a record stating the
information to which the notice relates.
(d) In a case governed by Subsection (b)(1), if the beneficiary's bank rightfully pays
the person identified by number and that person was not entitled to receive payment from the
originator, the amount paid may be recovered from that person to the extent allowed by the
law governing mistake and restitution as follows:
(1) If the originator is obliged to pay its payment order as stated in Subsection (c),
the originator has the right to recover.
(2) If the originator is not a bank and is not obliged to pay its payment order, the
originator's bank has the right to recover.

Legislative History

Added by Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 2024, No. 773, §1.