2012 Pennsylvania Consolidated Statutes
Title 13 - COMMERCIAL CODE
Chapter 4A2 - Issue and Acceptance of Payment Order
Section 4A202 - Authorized and verified payment orders

     § 4A202.  Authorized and verified payment orders.
        (a)  Authorized payment order.--A payment order received by
     the receiving bank is the authorized order of the person
     identified as sender if that person authorized the order or is
     otherwise bound by it under the law of agency.
        (b)  Verified payment order.--If a bank and its customer have
     agreed that the authenticity of payment orders issued to the
     bank in the name of the customer as sender will be verified
     pursuant to a security procedure, a payment order received by
     the receiving bank is effective as the order of the customer,
     whether or not authorized, if:
            (1)  the security procedure is a commercially reasonable
        method of providing security against unauthorized payment
        orders; and
            (2)  the bank proves that it accepted the payment order
        in good faith and in compliance with the security procedure
        and any written agreement or instruction of the customer
        restricting acceptance of payment orders issued in the name
        of the customer.
     The bank is not required to follow an instruction that violates
     a written agreement with the customer or notice of which is not
     received at a time and in a manner affording the bank a
     reasonable opportunity to act on it before the payment order is
     accepted.
        (c)  Commercial reasonableness of security procedure.--
     Commercial reasonableness of a security procedure is a question
     of law to be determined by considering the wishes of the
     customer expressed to the bank, the circumstances of the
     customer known to the bank, including the size, type and
     frequency of payment orders normally issued by the customer to
     the bank, alternative security procedures offered to the
     customer and security procedures in general use by customers and
     receiving banks similarly situated. A security procedure is
     deemed to be commercially reasonable if:
            (1)  the security procedure was chosen by the customer
        after the bank offered, and the customer refused, a security
        procedure that was commercially reasonable for that customer;
        and
            (2)  the customer expressly agreed in writing to be bound
        by any payment order, whether or not authorized, issued in
        its name and accepted by the bank in compliance with the
        security procedure chosen by the customer.
        (d)  Definition of "sender".--The term "sender" in this
     division includes the customer in whose name a payment order is
     issued if the order is the authorized order of the customer
     under subsection (a), or it is effective as the order of the
     customer under subsection (b).
        (e)  Amendments and cancellations of payment orders.--This
     section applies to amendments and cancellations of payment
     orders to the same extent it applies to payment orders.
        (f)  Rights and obligations.--Except as provided in this
     section and in section 4A203(a)(1) (relating to unenforceability
     of certain verified payment orders), rights and obligations
     arising under this section or section 4A203 may not be varied by
     agreement.

        Cross References.  Section 4A202 is referred to in sections
     4A203, 4A204 of this title.