§ 4-A-210 — Rejection of Payment Order

Section 4-A-210. Rejection of Payment Order.\n * (1) A payment order is rejected by the receiving bank by a notice of\nrejection transmitted to the sender orally, electronically, or in\nwriting. A notice of rejection need not use any particular words and is\nsufficient if it indicates that the receiving bank is rejecting the\norder or will not execute or pay the order. Rejection is effective when\nthe notice is given if transmission is by a means that is reasonable in\nthe circumstances. If notice of rejection is given by a means that is\nnot reasonable, rejection is effective when the notice is received. If\nan agreement of the sender and receiving bank establishes the means to\nbe used to reject a payment order, (i) any means complying with the\nagreement is reasonable and (ii) any means not complying is not\nreasonable unless no significant delay in receipt of the notice resulted\nfrom the use of the noncomplying means.\n * NB Effective until June 3, 2026\n * (1) A payment order is rejected by the receiving bank by a notice of\nrejection transmitted to the sender orally, or in a record. A notice of\nrejection need not use any particular words and is sufficient if it\nindicates that the receiving bank is rejecting the order or will not\nexecute or pay the order. Rejection is effective when the notice is\ngiven if transmission is by a means that is reasonable in the\ncircumstances. If notice of rejection is given by a means that is not\nreasonable, rejection is effective when the notice is received. If an\nagreement of the sender and receiving bank establishes the means to be\nused to reject a payment order, (i) any means complying with the\nagreement is reasonable and (ii) any means not complying is not\nreasonable unless no significant delay in receipt of the notice resulted\nfrom the use of the noncomplying means.\n * NB Effective June 3, 2026\n (2) This subsection applies if a receiving bank other than the\nbeneficiary's bank fails to execute a payment order despite the\nexistence on the execution date of a withdrawable credit balance in an\nauthorized account of the sender sufficient to cover the order. If the\nsender does not receive notice of rejection of the order on the\nexecution date and the authorized account of the sender does not bear\ninterest, the bank is obliged to pay interest to the sender on the\namount of the order for the number of days elapsing after the execution\ndate to the earlier of the day the order is cancelled pursuant to\nsubsection (4) of Section 4-A-211 or the day the sender receives notice\nor learns that the order was not executed, counting the final day of the\nperiod as an elapsed day. If the withdrawable credit balance during that\nperiod falls below the amount of the order, the amount of interest is\nreduced accordingly.\n (3) If a receiving bank suspends payments, all unaccepted payment\norders issued to it are deemed rejected at the time the bank suspends\npayments.\n (4) Acceptance of a payment order precludes a later rejection of the\norder. Rejection of a payment order precludes a later acceptance of the\norder.\n