§ 4-A-404 — Obligation of Beneficiary's Bank to Pay and Give Notice to Beneficiary

New York § 4-A-404

• Jurisdiction: New York
• Law UCC: Uniform Commercial Code
• Part 4: Payment
• Art. 4-A: Funds Transfers

Text

Section 4-A-404. Obligation of Beneficiary's Bank to Pay and Give Notice\n to Beneficiary.\n (1) Subject to subsection (5) of Section 4-A-211 and subsections (4)\nand (5) of Section 4-A-405, if a beneficiary's bank accepts a payment\norder, the bank is obliged to pay the amount of the order to the\nbeneficiary of the order. Payment is due on the payment date of the\norder, but if acceptance occurs on the payment date after the close of\nthe funds-transfer business day of the bank, payment is due on the next\nfunds-transfer business day. If the bank refuses to pay after demand by\nthe beneficiary and receipt of notice of particular circumstances that\nwill give rise to consequential damages as a result of nonpayment, the\nbeneficiary may recover damages resulting from the refusal to pay to the\nextent the bank had notice of the damages, unless the bank proves that\nit did not pay because of a reasonable doubt concerning the right of the\nbeneficiary to payment.\n (2) If a payment order accepted by the beneficiary's bank instructs\npayment to an account of the beneficiary, the bank is obliged to notify\nthe beneficiary of receipt of the order before midnight of the next\nfunds-transfer business day following the payment date. If the payment\norder does not instruct payment to an account of the beneficiary, the\nbank is required to notify the beneficiary only if notice is required by\nthe order. Notice may be given by first class mail or any other means\nreasonable in the circumstances. If the bank fails to give the required\nnotice, the bank is obliged to pay interest to the beneficiary on the\namount of the payment order from the day notice should have been given\nuntil the day the beneficiary learned of receipt of the payment order by\nthe bank. No other damages are recoverable. Reasonable attorney's fees\nare also recoverable if demand for interest is made and refused before\nan action is brought on the claim.\n (3) The right of a beneficiary to receive payment and damages as\nstated in subsection (1) may not be varied by agreement or a\nfunds-transfer system rule. The right of a beneficiary to be notified as\nstated in subsection (2) may be varied by agreement of the beneficiary\nor by a funds-transfer system rule if the beneficiary is notified of the\nrule before initiation of the funds transfer.\n