Texas Business & Commerce Code - Section 4A.210. Rejection Of Payment Order
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§ 4A.210. REJECTION OF PAYMENT ORDER. (a) A payment
order is rejected by the receiving bank by a notice of rejection
transmitted to the sender orally, electronically, or in writing. A
notice of rejection need not use any particular words and is
sufficient if it indicates that the receiving bank is rejecting the
order or will not execute or pay the order. Rejection is effective
when the notice is given if transmission is by a means that is
reasonable under the circumstances. If notice of rejection is
given by a means that is not reasonable, rejection is effective when
the notice is received. If an agreement of the sender and receiving
bank establishes the means to be used to reject a payment order:
(1) any means complying with the agreement is
reasonable; and
(2) any means not complying is not reasonable unless
no significant delay in receipt of the notice resulted from the use
of the noncomplying means.
(b) This subsection applies if a receiving bank other than
the beneficiary's bank fails to execute a payment order despite the
existence on the execution date of a withdrawable credit balance in
an authorized account of the sender sufficient to cover the order.
If the sender does not receive notice of rejection of the order on
the execution 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
execution date to the earlier of the day the order is canceled
pursuant to Section 4A.211(d) or the day the sender receives notice
or learns that the order was not executed, counting the final day of
the period as an elapsed day. If the withdrawable credit balance
during that period falls below the amount of the order, the amount
of interest is reduced accordingly.
(c) If a receiving bank suspends payments, all unaccepted
payment orders issued to it are deemed rejected at the time the bank
suspends payments.
(d) Acceptance of a payment order precludes a later
rejection of the order. Rejection of a payment order precludes a
later acceptance of the order.
Added by Acts 1993, 73rd Leg., ch. 570, § 7, eff. Sept. 1, 1993.
Section: 4A.203 4A.204 4A.205 4A.206 4A.207 4A.208 4A.209 4A.210 4A.211 4A.212 4A.301 4A.302 4A.303 4A.304 4A.305
Last modified: August 10, 2007
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