§ 10:4A-210 — Rejection of payment order

Louisiana § 10:4A-210

• Jurisdiction: Louisiana
• Title 10: Commercial Laws

Text

§4A-210. Rejection of payment order
(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 cancelled pursuant to R.S. 10:4A-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

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