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Texas Business & Commerce Code - Section 4A.208. Misdescription Of Intermediary Bank Or Beneficiary's Bank

Legal Research Home > Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 4A.208. Misdescription Of Intermediary Bank Or Beneficiary's Bank

§ 4A.208. MISDESCRIPTION OF INTERMEDIARY BANK OR 
BENEFICIARY'S BANK.  (a) This subsection applies to a payment order 
identifying an intermediary bank or the beneficiary's bank only by 
an identifying number.
		(1)  The receiving bank may rely on the number as the 
proper identification of the intermediary or beneficiary's bank and 
does not need to determine whether the number identifies a bank.
		(2)  The sender is obliged to compensate the receiving 
bank for any loss and expenses incurred by the receiving bank as a 
result of its reliance on the number in executing or attempting to 
execute the order.
	(b)  This subsection applies to a payment order identifying 
an intermediary bank or the beneficiary's bank both by name and an 
identifying number if the name and number identify different 
persons.
		(1)  If the sender is a bank, the receiving bank may 
rely on the number as the proper identification of the intermediary 
or beneficiary's bank if the receiving bank, when it executes the 
sender's order, does not know that the name and number identify 
different persons.  The receiving bank need not determine whether 
the name and number refer to the same person or whether the number 
refers to a bank.  The sender is obliged to compensate the receiving 
bank for any loss and expenses incurred by the receiving bank as a 
result of its reliance on the number in executing or attempting to 
execute the order.
		(2)  If the sender is not a bank and the receiving bank 
proves that the sender, before the payment order was accepted, had 
notice that the receiving bank might rely on the number as the 
proper identification of the intermediary or beneficiary's bank 
even if it identifies a person different from the bank identified by 
name, the rights and obligations of the sender and the receiving 
bank are governed by Subsection (b)(1), as though the sender were a 
bank.  Proof of notice may be made by any admissible evidence.  The 
receiving bank satisfies the burden of proof if it proves that the 
sender, before the payment order was accepted, signed a writing 
stating the information to which the notice relates.
		(3)  Regardless of whether the sender is a bank, the 
receiving bank may rely on the name as the proper identification of 
the intermediary or beneficiary's bank if the receiving bank, at 
the time it executes the sender's order, does not know that the name 
and number identify different persons.  The receiving bank need not 
determine whether the name and number refer to the same person.
		(4)  If the receiving bank knows that the name and 
number identify different persons, reliance on either the name or 
the number in executing the sender's payment order is a breach of 
the obligation stated in Section 4A.302(a)(1).

Added by Acts 1993, 73rd Leg., ch. 570, § 7, eff. Sept. 1, 1993.           

Last modified: August 10, 2007