There is a newer version of the Kentucky Revised Statutes
2009 Kentucky Revised Statutes
Article 4A Funds Transfers
355.4A.211 Cancellation and amendment of payment order.
Download pdfsecurity 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: 1. That is a duplicate of a payment order previously issued by the sender; 2. That orders payment to a beneficiary not entitled to receive payment
from the originator; or 3. 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 issue 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 subsection (3)(b). Effective: July 14, 1992
History: Created 1992 Ky. Acts ch. 116, sec. 42, effective July 14, 1992.
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