Texas Business & Commerce Code - Section 4A.402. Obligation Of Sender To Pay Receiving Bank
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§ 4A.402. OBLIGATION OF SENDER TO PAY RECEIVING
BANK. (a) This section is subject to Sections 4A.205 and 4A.207.
(b) With respect to a payment order issued to the
beneficiary's bank, acceptance of the order by the bank obliges the
sender to pay the bank the amount of the order, but payment is not
due until the payment date of the order.
(c) This subsection is subject to Subsection (e) and to
Section 4A.303. With respect to a payment order issued to a
receiving bank other than the beneficiary's bank, acceptance of the
order by the receiving bank obliges the sender to pay the bank the
amount of the sender's order. Payment by the sender is not due
until the execution date of the sender's order. The obligation of
that sender to pay its payment order is excused if the funds
transfer is not completed by acceptance by the beneficiary's bank
of a payment order instructing payment to the beneficiary of that
sender's payment order.
(d) If the sender of a payment order pays the order and was
not obliged to pay all or part of the amount paid, the bank
receiving payment is obliged to refund payment to the extent the
sender was not obliged to pay. Except as provided by Sections
4A.204 and 4A.304, interest is payable on the refundable amount
from the date of payment.
(e) If a funds transfer is not completed as provided by
Subsection (c) and an intermediary bank is obliged to refund
payment as provided by Subsection (d) but is unable to do so because
not permitted by applicable law or because the bank suspends
payments, a sender in the funds transfer that executed a payment
order in compliance with an instruction, as provided by Section
4A.302(a)(1), to route the funds transfer through that intermediary
bank is entitled to receive or retain payment from the sender of the
payment order that it accepted. The first sender in the funds
transfer that issued an instruction requiring routing through that
intermediary bank is subrogated to the right of the bank that paid
the intermediary bank to a refund as stated in Subsection (d).
(f) The right of the sender of a payment order to be excused
from the obligation to pay the order as stated in Subsection (c) or
to receive a refund under Subsection (d) may not be varied by
agreement.
Added by Acts 1993, 73rd Leg., ch. 570, § 7, eff. Sept. 1, 1993.
Section: 4A.212 4A.301 4A.302 4A.303 4A.304 4A.305 4A.401 4A.402 4A.403 4A.404 4A.405 4A.406 4A.501 4A.502 4A.503
Last modified: August 10, 2007
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