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355.4A-402 Obligation of sender to pay receiving bank.
(1)
(2)
(3)
(4)
(5)
(6)
This section is subject to KRS 355.4A-205 and 355.4A-207.
With respect to a payment order issued to the beneficiary's bank, acceptance of the
order by the bank obliges the sender to pay the bank the amount of the order, but
payment is not due until the payment date of the order.
This subsection is subject to subsection (5) and to KRS 355.4A-303. With respect
to a payment order issued to a receiving bank other than the beneficiary's bank,
acceptance of the order by the receiving bank obliges the sender to pay the bank the
amount of the sender's order. Payment by the sender is not due until the execution
date of the sender's order. The obligation of that sender to pay its payment order is
excused if the funds transfer is not completed by acceptance by the beneficiary's
bank of a payment order instructing payment to the beneficiary of that sender's
payment order.
If the sender of a payment order pays the order and was not obliged to pay all or part
of the amount paid, the bank receiving payment is obliged to refund payment to the
extent the sender was not obliged to pay. Except as provided in KRS 355.4A-204
and 355.4A-304, interest is payable on the refundable amount from the date of
payment.
If a funds transfer is not completed as stated in subsection (3) and an intermediary
bank is obliged to refund payment as stated in subsection (4) but is unable to do so
because not permitted by applicable law or because the bank suspends payments, a
sender in the funds transfer that executed a payment order in compliance with an
instruction, as stated in KRS 355.4A-302(1)(a), to route the funds transfer through
that intermediary bank is entitled to receive or retain payment from the sender of the
payment order that it accepted. The first sender in the funds transfer that issued an
instruction requiring routing through that intermediary bank is subrogated to the
right of the bank that paid the intermediary bank to refund as stated in subsection
(4).
The right of the sender of a payment order to be excused from the obligation to pay
the order as stated in subsection (3) or to receive refund under subsection (4) may
not be varied by agreement.
Effective: July 14, 1992
History: Created 1992 Ky. Acts ch. 116, sec. 50, effective July 14, 1992.
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