California Commercial Code Section 3418
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California Laws > Commercial Code > California Commercial Code Section 3418
3418. (a) Except as provided in subdivision (c), if the drawee of a
draft pays or accepts the draft and the drawee acted on the mistaken
belief that (1) payment of the draft had not been stopped pursuant
to Section 4403 or (2) the signature of the drawer of the draft was
authorized, the drawee may recover the amount of the draft from the
person to whom or for whose benefit payment was made or, in the case
of acceptance, may revoke the acceptance. Rights of the drawee under
this subdivision are not affected by failure of the drawee to
exercise ordinary care in paying or accepting the draft.
(b) Except as provided in subdivision (c), if an instrument has
been paid or accepted by mistake and the case is not covered by
subdivision (a), the person paying or accepting may, to the extent
permitted by the law governing mistake and restitution, (1) recover
the payment from the person to whom or for whose benefit payment was
made or (2) in the case of acceptance, may revoke the acceptance.
(c) The remedies provided by subdivision (a) or (b) may not be
asserted against a person who took the instrument in good faith and
for value or who in good faith changed position in reliance on the
payment or acceptance. This subdivision does not limit remedies
provided by Section 3417 or 4407.
(d) Notwithstanding Section 4215, if an instrument is paid or
accepted by mistake and the payor or acceptor recovers payment or
revokes acceptance under subdivision (a) or (b), the instrument is
deemed not to have been paid or accepted and is treated as
dishonored, and the person from whom payment is recovered has rights
as a person entitled to enforce the dishonored instrument.
Last modified: February 22, 2013