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Texas Business & Commerce Code - Section 4A.211. Cancellation And Amendment Of Payment Order

Legal Research Home > Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 4A.211. Cancellation And Amendment Of Payment Order

§ 4A.211. CANCELLATION AND AMENDMENT OF PAYMENT 
ORDER.  (a) A communication of the sender of a payment order 
cancelling or amending the order may be transmitted to the 
receiving bank orally, electronically, or in writing.  If a 
security procedure is in effect between the sender and the 
receiving bank, the communication is not effective to cancel or 
amend the order unless the communication is verified pursuant to 
the security procedure or the bank agrees to the cancellation or 
amendment.
	(b)  Subject to Subsection (a), a communication by the sender 
cancelling or amending a payment order is effective to cancel or 
amend the order if notice of the communication is received at a time 
and in a manner affording the receiving bank a reasonable 
opportunity to act on the communication before the bank accepts the 
payment order.
	(c)  After a payment order has been accepted, cancellation or 
amendment of the order is not effective unless the receiving bank 
agrees or a funds transfer system rule allows cancellation or 
amendment without agreement of the bank.
		(1)  With respect to a payment order accepted by a 
receiving bank other than the beneficiary's bank, cancellation or 
amendment is not effective unless a conforming cancellation or 
amendment of the payment order issued by the receiving bank is also 
made.
		(2)  With respect to a payment order accepted by the 
beneficiary's bank, cancellation or amendment is not effective 
unless the order was issued in execution of an unauthorized payment 
order or because of a mistake by a sender in the funds transfer 
which resulted in the issuance of a payment order (i) that is a 
duplicate of a payment order previously issued by the sender, (ii) 
that orders payment to a beneficiary not entitled to receive 
payment from the originator, or (iii) that orders payment in an 
amount greater than the amount the beneficiary was entitled to 
receive from the originator.  If the payment order is canceled or 
amended, the beneficiary's bank is entitled to recover from the 
beneficiary any amount paid to the beneficiary to the extent 
allowed by the law governing mistake and restitution.
	(d)  An unaccepted payment order is canceled by operation of 
law at the close of the fifth funds transfer business day of the 
receiving bank after the execution date or payment date of the 
order.
	(e)  A canceled payment order cannot be accepted.  If an 
accepted payment order is canceled, the acceptance is nullified and 
no person has any right or obligation based on the acceptance.  
Amendment of a payment order is deemed to be cancellation of the 
original order at the time of amendment and issue of a new payment 
order in the amended form at the same time.
	(f)  Unless otherwise provided in an agreement of the parties 
or in a funds transfer system rule, if the receiving bank, after 
accepting a payment order, agrees to cancellation or amendment of 
the order by the sender or is bound by a funds transfer system rule 
allowing cancellation or amendment without the bank's agreement, 
the sender, whether or not cancellation or amendment is effective, 
is liable to the bank for any loss and expenses, including 
reasonable attorney's fees, incurred by the bank as a result of the 
cancellation or amendment or attempted cancellation or amendment.
	(g)  A payment order is not revoked by the death or legal 
incapacity of the sender unless the receiving bank knows of the 
death or of an adjudication of incapacity by a court of competent 
jurisdiction and has reasonable opportunity to act before 
acceptance of the order.
	(h)  A funds transfer system rule is not effective to the 
extent it conflicts with Subsection (c)(2).

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

Last modified: August 10, 2007