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Texas Business & Commerce Code - Section 4A.204. Refund Of Payment And Duty Of Customer To Report With Respect To Unauthorized Payment Order

Legal Research Home > Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 4A.204. Refund Of Payment And Duty Of Customer To Report With Respect To Unauthorized Payment Order

§ 4A.204. REFUND OF PAYMENT AND DUTY OF CUSTOMER TO REPORT 
WITH RESPECT TO UNAUTHORIZED PAYMENT ORDER.  (a) If a receiving 
bank accepts a payment order issued in the name of its customer as 
sender which is (i) not authorized and not effective as the order of 
the customer under Section 4A.202, or (ii) not enforceable, in 
whole or in part, against the customer under Section 4A.203, the 
bank shall refund any payment of the payment order received from the 
customer to the extent the bank is not entitled to enforce payment 
and shall pay interest on the refundable amount calculated from the 
date the bank received payment to the date of the refund.  However, 
the customer is not entitled to interest from the bank on the amount 
to be refunded if the customer fails to exercise ordinary care to 
determine that the order was not authorized by the customer and to 
notify the bank of the relevant facts within a reasonable time not 
exceeding 90 days after the date the customer received notification 
from the bank that the order was accepted or that the customer's 
account was debited with respect to the order.  The bank is not 
entitled to any recovery from the customer on account of a failure 
by the customer to give notification as stated in this section.
	(b)  Reasonable time under Subsection (a) may be fixed by 
agreement as stated in Section 1.302(b), but the obligation of a 
receiving bank to refund payment as stated in Subsection (a) may not 
otherwise be varied by agreement.

Added by Acts 1993, 73rd Leg., ch. 570, § 7, eff. Sept. 1, 1993.  
Amended by Acts 2003, 78th Leg., ch. 542, § 15, eff. Sept. 1, 
2003.

Last modified: August 10, 2007