§ 41-04.1-19 — (4A-211) Cancellation and amendment of payment order

North Dakota § 41-04.1-19

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

Text

1. A communication of the sender of a payment order canceling or amending the order
may be transmitted to the receiving bank orally or in a record. If a security procedure is
in effect between the sender and the receiving bank, the communication is not
effective to cancel or amend the order unless the communication is verified pursuant to
the security procedure or the bank agrees to the cancellation or amendment.
2. Subject to subsection 1, a communication by the sender canceling or amending a
payment order is effective to cancel or amend the order if notice of the communication
is received at a time and in a manner affording the receiving bank a reasonable
opportunity to act on the communication before the bank accepts the payment order.
3. After a payment order has been accepted, cancellation or amendment of the order is
not effective unless the receiving bank agrees or a funds-transfer system rule allows
cancellation or amendment without agreement of the bank.
a. With respect to a payment order accepted by a receiving bank other than the
beneficiary's bank, cancellation or amendment is not effective unless a
conforming cancellation or amendment of the payment order issued by the
receiving bank is also made.
b. With respect to a payment order accepted by the beneficiary's bank, cancellation
or amendment is not effective unless the order was issued in execution of an
unauthorized payment order, or because of a mistake by a sender in the funds
transfer which resulted in the issuance of a payment order that is a duplicate of a
payment order previously issued by the sender, that orders payment to a
beneficiary not entitled to receive payment from the originator, or that orders
payment in an amount greater than the amount the beneficiary was entitled to
receive from the originator. If the payment order is canceled or amended, the
beneficiary's bank is entitled to recover from the beneficiary any amount paid to
the beneficiary to the extent allowed by the law governing mistake and restitution.

4. An unaccepted payment order is canceled by operation of law at the close of the fifth
funds-transfer business day of the receiving bank after the execution date or payment
date of the order.
5. A canceled payment order cannot be accepted. If an accepted payment order is
canceled, the acceptance is nullified and no person has any right or obligation based
on the acceptance. Amendment of a payment order is deemed to be cancellation of
the original order at the time of amendment and issuance of a new payment order in
the amended form at the same time.
6. Unless otherwise provided in an agreement of the parties or in a funds-transfer system
rule, if the receiving bank, after accepting a payment order, agrees to cancellation or
amendment of the order by the sender or is bound by a funds-transfer system rule
allowing cancellation or amendment without the bank's agreement, the sender,
whether or not cancellation or amendment is effective, is liable to the bank for any loss
and expenses, including reasonable attorney's fees, incurred by the bank as a result of
the cancellation or amendment or attempted cancellation or amendment.
7. A payment order is not revoked by the death or legal incapacity of the sender unless
the receiving bank knows of the death or of an adjudication of incapacity by a court of
competent jurisdiction and has reasonable opportunity to act before acceptance of the
order.
8. A funds-transfer system rule is not effective to the extent it conflicts with subdivision b
of subsection 3.