§ 41-04.1-18 — (4A-210) Rejection of payment order

North Dakota § 41-04.1-18

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-04.1: Funds Transfers

Text

1. 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, any means complying with the agreement
is reasonable, and any means not complying is not reasonable unless no significant
delay in receipt of the notice resulted from the use of the noncomplying means.
2. 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 to 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
under subsection 4 of section 41-04.1-19 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.
3. If a receiving bank suspends payments, all unaccepted payment orders issued to it are
deemed rejected at the time the bank suspends payments.
4. Acceptance of a payment order precludes a later rejection of the order. Rejection of a
payment order precludes a later acceptance of the order.