2012 Pennsylvania Consolidated Statutes
Title 13 - COMMERCIAL CODE
Chapter 4A2 - Issue and Acceptance of Payment Order
Section 4A205 - Erroneous payment orders

     § 4A205.  Erroneous payment orders.
        (a)  Types of erroneous payment orders.--
            (1)  The rules set forth under paragraph (2) apply if an
        accepted payment order was transmitted pursuant to a security
        procedure for the detection of error and the payment order:
                (i)  erroneously instructed payment to a beneficiary
            not intended by the sender;
                (ii)  erroneously instructed payment in an amount
            greater than the amount intended by the sender; or
                (iii)  was an erroneously transmitted duplicate of a
            payment order previously sent by the sender.
            (2)  (i)  If the sender proves that the sender or a
            person acting on behalf of the sender pursuant to section
            4A206 (relating to transmission of payment order through
            funds-transfer or other communication system) complied
            with the security procedure and that the error would have
            been detected if the receiving bank had also complied,
            the sender is not obliged to pay the order to the extent
            stated in subparagraphs (ii) and (iii).
                (ii)  If the funds transfer is completed on the basis
            of an erroneous payment order described in paragraph
            (1)(i) or (iii), the sender is not obliged to pay the
            order and the receiving bank is entitled to recover from
            the beneficiary any amount paid to the beneficiary to the
            extent allowed by the law governing mistake and
            restitution.
                (iii)  If the funds transfer is completed on the
            basis of a payment order described in paragraph (1)(ii),
            the sender is not obliged to pay the order to the extent
            the amount received by the beneficiary is greater than
            the amount intended by the sender. In that case, the
            receiving bank is entitled to recover from the
            beneficiary the excess amount received to the extent
            allowed by the law governing mistake and restitution.
        (b)  Duty of sender.--If the sender of an erroneous payment
     order described in subsection (a) is not obliged to pay all or
     part of the order and the sender receives notification from the
     receiving bank that the order was accepted by the bank or that
     the sender's account was debited with respect to the order, the
     sender has a duty to exercise ordinary care, on the basis of
     information available to the sender, to discover the error with
     respect to the order and to advise the bank of the relevant
     facts within a reasonable time, not exceeding 90 days, after the
     bank's notification was received by the sender. If the bank
     proves that the sender failed to perform that duty, the sender
     is liable to the bank for the loss the bank proves it incurred
     as a result of the failure, but the liability of the sender may
     not exceed the amount of the sender's order.
        (c)  Amendments to payment orders.--This section applies to
     amendments to payment orders to the same extent it applies to
     payment orders.

        Cross References.  Section 4A205 is referred to in section
     4A402 of this title.