2016 Kentucky Revised Statutes CHAPTER 355 - UNIFORM COMMERCIAL CODE Article 4A - Funds Transfers 355.4A-404 Obligation of beneficiary's bank to pay and give notice to beneficiary.
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355.4A-404 Obligation of beneficiary's bank to pay and give notice to beneficiary.
(1)
(2)
(3)
Subject to KRS 355.4A-211(5), 355.4A-405(4), and 355.4A-405(5), if a
beneficiary's bank accepts a payment order, the bank is obliged to pay the amount of
the order to the beneficiary of the order. Payment is due on the payment date of the
order, but if acceptance occurs on the payment date after the close of the fundstransfer business day of the bank, payment is due on the next funds-transfer
business day. If the bank refuses to pay after demand by the beneficiary and receipt
of notice of particular circumstances that will give rise to consequential damages as
a result of nonpayment, the beneficiary may recover damages resulting from the
refusal to pay to the extent the bank had notice of the damages, unless the bank
proves that it did not pay because of a reasonable doubt concerning the right of the
beneficiary to payment.
If a payment order accepted by the beneficiary's bank instructs payment to an
account of the beneficiary, the bank is obliged to notify the beneficiary of receipt of
the order before midnight of the next funds-transfer business day following the
payment date. If the payment order does not instruct payment to an account of the
beneficiary, the bank is required to notify the beneficiary only if notice is required
by the order. Notice may be given by first class mail or any other means reasonable
in the circumstances. If the bank fails to give the required notice, the bank is obliged
to pay interest to the beneficiary on the amount of the payment order from the day
notice should have been given until the day the beneficiary learned of receipt of the
payment order by the bank. No other damages are recoverable. Reasonable
attorney's fees are also recoverable if demand for interest is made and refused before
an action is brought on the claim.
The right of a beneficiary to receive payment and damages as stated in subsection
(1) may not be varied by agreement or a funds-transfer system rule. The right of a
beneficiary to be notified as stated in subsection (2) may be varied by agreement of
the beneficiary or by a funds-transfer system rule if the beneficiary is notified of the
rule before initiation of the funds transfer.
Effective: July 14, 1992
History: Created 1992 Ky. Acts ch. 116, sec. 52, effective July 14, 1992.
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