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355.4A-209 Acceptance of payment order.
(1)
(2)
(3)
(4)
Subject to subsection (4), a receiving bank other than the beneficiary's bank accepts
a payment order when it executes the order.
Subject to subsections (3) and (4), a beneficiary's bank accepts a payment order at
the earliest of the following times:
(a) When the bank:
1.
Pays the beneficiary as stated in KRS 355.4A-405(1) or (2); or
2.
Notifies the beneficiary of receipt of the order or that the account of the
beneficiary has been credited with respect to the order unless the notice
indicates that the bank is rejecting the order or that funds with respect to
the order may not be withdrawn or used until receipt of payment from
the sender of the order.
(b) When the bank receives payment of the entire amount of the sender's order
pursuant to KRS 355.4A-403(1)(a) or (b); or
(c) The opening of the next funds-transfer business day of the bank following the
payment date of the order if, at that time, the amount of the sender's order is
fully covered by a withdrawable credit balance in an authorized account of the
sender or the bank has otherwise received full payment from the sender,
unless the order was rejected before that time or is rejected within;
1.
One hour after that time; or
2.
One hour after the opening of the next business day of the sender
following the payment date if that time is later. If notice of rejection is
received by the sender after the payment 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 payment date to the day the sender receives notice or learns that
the order was not accepted, counting that day as an elapsed day. If the
withdrawable credit balance during that period falls below the amount of
the order, the amount of interest payable is reduced accordingly.
Acceptance of a payment order cannot occur before the order is received by the
receiving bank. Acceptance does not occur under subsection (2)(b) or (2)(c) if the
beneficiary of the payment order does not have an account with the receiving bank,
the account has been closed, or the receiving bank is not permitted by law to receive
credits for the beneficiary's account.
A payment order issued to the originator's bank cannot be accepted until the
payment date if the bank is the beneficiary's bank, or the execution date if the bank
is not the beneficiary's bank. If the originator's bank executes the originator's
payment order before the execution date or pays the beneficiary of the originator's
payment order before the payment date and the payment order is subsequently
canceled pursuant to KRS 355.4A-211(2), the bank may recover from the
beneficiary any payment received to the extent allowed by the law governing
mistake and restitution.
Effective: July 14, 1992
History: Created 1992 Ky. Acts ch. 116, sec. 40, effective July 14, 1992.
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