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Texas Business & Commerce Code - Section 4A.305. Liability For Late Or Improper Execution Or Failure To Execute Payment Order

Legal Research Home > Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 4A.305. Liability For Late Or Improper Execution Or Failure To Execute Payment Order

§ 4A.305. LIABILITY FOR LATE OR IMPROPER EXECUTION OR 
FAILURE TO EXECUTE PAYMENT ORDER.  (a) If a funds transfer is 
completed but execution of a payment order by the receiving bank in 
breach of Section 4A.302 of this chapter results in delay in payment 
to the beneficiary, the bank is obliged to pay interest to either 
the originator or the beneficiary of the funds transfer for the 
period of delay caused by the improper execution.  Except as 
provided by Subsection (c), additional damages are not recoverable.
	(b)  If execution of a payment order by a receiving bank in 
breach of Section 4A.302 results in (i) noncompletion of the funds 
transfer, (ii) failure to use an intermediary bank designated by 
the originator, or (iii) issuance of a payment order that does not 
comply with the terms of the payment order of the originator, the 
bank is liable to the originator for its expenses in the funds 
transfer and for incidental expenses and interest losses, to the 
extent not covered by Subsection (a) of this section, resulting 
from the improper execution.  Except as provided by Subsection (c), 
additional damages are not recoverable.
	(c)  In addition to the amounts payable under Subsections (a) 
and (b), damages, including consequential damages, are recoverable 
to the extent provided in an express written agreement of the 
receiving bank.
	(d)  If a receiving bank fails to execute a payment order it 
was obliged by express agreement to execute, the receiving bank is 
liable to the sender for its expenses in the transaction and for 
incidental expenses and interest losses resulting from the failure 
to execute.  Additional damages, including consequential damages, 
are recoverable to the extent provided in an express written 
agreement of the receiving bank, but are not otherwise recoverable.
	(e)  Reasonable attorney's fees are recoverable if demand 
for compensation under Subsection (a) or (b) is made and refused 
before an action is brought on the claim.  If a claim is made for 
breach of an agreement under Subsection (d) and the agreement does 
not provide for damages, reasonable attorney's fees are recoverable 
if demand for compensation under Subsection (d) of this section is 
made and refused before an action is brought on the claim.
	(f)  Except as provided by this section, the liability of a 
receiving bank under Subsections (a) and (b) of this section may not 
be varied by agreement.

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

Last modified: August 10, 2007