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Texas Business & Commerce Code - Section 4A.209. Acceptance Of Payment Order

Legal Research Home > Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 4A.209. Acceptance Of Payment Order

§ 4A.209. ACCEPTANCE OF PAYMENT ORDER.  (a) Subject to 
Subsection (d), a receiving bank other than the beneficiary's bank 
accepts a payment order when it executes the order.
	(b)  Subject to Subsections (c) and (d), a beneficiary's bank 
accepts a payment order at the earliest of the following times:
		(1)  when the bank (i) pays the beneficiary as stated in 
Section 4A.405(a) or (b), or (ii) notifies the beneficiary of 
receipt of the order or that the account of the beneficiary has been 
credited with respect to the order unless the notice indicates that 
the bank is rejecting the order or that funds with respect to the 
order may not be withdrawn or used until receipt of payment from the 
sender of the order;
		(2)  when the bank receives payment of the entire 
amount of the sender's order pursuant to Section 4A.403(a)(1) or 
(2);  or
		(3)  the opening of the next funds transfer business 
day of the bank following the payment date of the order if, at that 
time, the amount of the sender's order is fully covered by a 
withdrawable credit balance in an authorized account of the sender 
or the bank has otherwise received full payment from the sender, 
unless the order was rejected before that time or is rejected within 
(i) one hour after that time, or (ii) one hour after the opening of 
the next business day of the sender following the payment date if 
that time is later.  If notice of rejection is received by the 
sender after the payment date and the authorized account of the 
sender does not bear interest, the bank is obliged to pay interest 
to the sender on the amount of the order for the number of days 
elapsing after the payment date to the day the sender receives 
notice or learns that the order was not accepted, counting that day 
as an elapsed day.  If the withdrawable credit balance during that 
period falls below the amount of the order, the amount of interest 
payable is reduced accordingly.
	(c)  Acceptance of a payment order cannot occur before the 
order is received by the receiving bank.  Acceptance does not occur 
under Subsection (b)(2) or (3) if the beneficiary of the payment 
order does not have an account with the receiving bank, the account 
has been closed, or the receiving bank is not permitted by law to 
receive credits for the beneficiary's account.
	(d)  A payment order issued to the originator's bank cannot 
be accepted until the payment date if the bank is the beneficiary's 
bank, or the execution date if the bank is not the beneficiary's 
bank.  If the originator's bank executes the originator's payment 
order before the execution date or pays the beneficiary of the 
originator's payment order before the payment date and the payment 
order is subsequently canceled pursuant to Section 4A.211(b), the 
bank may recover from the beneficiary any payment received to the 
extent allowed by the law governing mistake and restitution.

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

Last modified: August 10, 2007