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355.4A-303 Erroneous execution of payment order.
(1)
(2)
(3)
A receiving bank that:
(a) Executes the payment order of the sender by issuing a payment order in an
amount greater than the amount of the sender's order; or
(b) Issues a payment order in execution of the sender's order and then issues a
duplicate order, is entitled to payment of the amount of the sender's order
under KRS 355.4A-402(3) if that subsection is otherwise satisfied. The bank
is entitled to recover from the beneficiary of the erroneous order the excess
payment received to the extent allowed by the law governing mistake and
restitution.
A receiving bank that executes the payment order of the sender by issuing a
payment order in an amount less than the amount of the sender's order is entitled to
payment of the amount of the sender's order under KRS 355.4A-402(3) if:
(a) That subsection is otherwise satisfied; and
(b) The bank corrects its mistake by issuing an additional payment order for the
benefit of the beneficiary of the sender's order. If the error is not corrected, the
issuer of the erroneous order is entitled to receive or retain payment from the
sender of the order it accepted only to the extent of the amount of the
erroneous order. This subsection does not apply if the receiving bank executes
the sender's payment order by issuing a payment order in an amount less than
the amount of the sender's order for the purpose of obtaining payment of its
charges for services and expenses pursuant to instruction of the sender.
If a receiving bank executes the payment order of the sender by issuing a payment
order to a beneficiary different from the beneficiary of the sender's order and the
funds transfer is completed on the basis of that error, the sender of the payment
order that was erroneously executed and all previous senders in the funds transfer
are not obliged to pay the payment orders they issued. The issuer of the erroneous
order is entitled to recover from the beneficiary of the order the 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. 46, effective July 14, 1992.
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