Commercial Code §§ 11101-11507

11101.  This division may be cited as Uniform Commercial Code--Funds
Transfers.

11102.  Except as otherwise provided in Section 11108, this division
applies to funds transfers defined in Section 11104.

11103.  (a) In this division:
   (1) "Payment order" means an instruction of a sender to a
receiving bank, transmitted orally, electronically, or in writing, to
pay, or to cause another bank to pay, a fixed or determinable amount
of money to a beneficiary if all of the following apply:
   (i) The instruction does not state a condition to payment to the
beneficiary other than time of payment.
   (ii) The receiving bank is to be reimbursed by debiting an account
of, or otherwise receiving payment from, the sender.
   (iii) The instruction is transmitted by the sender directly to the
receiving bank or to an agent, funds-transfer system, or
communication system for transmittal to the receiving bank.
   (2) "Beneficiary" means the person to be paid by the beneficiary's
bank.
   (3) "Beneficiary's bank" means the bank identified in a payment
order in which an account of the beneficiary is to be credited
pursuant to the order or which otherwise is to make payment to the
beneficiary if the order does not provide for payment to an account.

   (4) "Receiving bank" means the bank to which the sender's
instruction is addressed.
   (5) "Sender" means the person giving the instruction to the
receiving bank.
   (b) If an instruction complying with paragraph (1) of subdivision
(a) is to make more than one payment to a beneficiary, the
instruction is a separate payment order with respect to each payment.

   (c) A payment order is issued when it is sent to the receiving
bank.

11104.  In this division:
   (a) "Funds transfer" means the series of transactions, beginning
with the originator's payment order, made for the purpose of making
payment to the beneficiary of the order.  The term includes any
payment order issued by the originator's bank or an intermediary bank
intended to carry out the originator's payment order.  A funds
transfer is completed by acceptance by the beneficiary's bank of a
payment order for the benefit of the beneficiary of the originator's
payment order.
   (b) "Intermediary bank" means a receiving bank other than the
originator's bank or the beneficiary's bank.
   (c) "Originator" means the sender of the first payment order in a
funds transfer.
   (d) "Originator's bank" means (i) the receiving bank to which the
payment order of the originator is issued if the originator is not a
bank, or (ii) the originator if the originator is a bank.

11105.  (a) In this division:
   (1) "Authorized account" means a deposit account of a customer in
a bank designated by the customer as a source of payment of payment
orders issued by the customer to the bank.  If a customer does not so
designate an account, any account of the customer is an authorized
account if payment of a payment order from that account is not
inconsistent with a restriction on the use of that account.
   (2) "Bank" means a person engaged in the business of banking and
includes a savings bank, savings and loan association, credit union,
and trust company.  A branch or separate office of a bank is a
separate bank for purposes of this division.
   (3) "Customer" means a person, including a bank, having an account
with a bank or from whom a bank has agreed to receive payment
orders.
   (4) "Funds-transfer business day" of a receiving bank means the
part of a day during which the receiving bank is open for the
receipt, processing, and transmittal of payment orders and
cancellations and amendments of payment orders.
   (5) "Funds-transfer system" means a wire transfer network,
automated clearinghouse, or other communication system of a
clearinghouse or other association of banks through which a payment
order by a bank may be transmitted to the bank to which the order is
addressed.
   (6) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
   (7) "Prove" with respect to a fact means to meet the burden of
establishing the fact under subdivision (8) of Section 1201.
   (b) Other definitions applying to this division and the sections
in which they appear are:
   Acceptance:  Section 11209.
   Beneficiary:  Section 11103.
   Beneficiary's bank:  Section 11103.
   Executed:  Section 11301.
   Execution date:  Section 11301.
   Funds transfer:  Section 11104.
   Funds-transfer system rule:  Section 11501.
   Intermediary bank:  Section 11104.
   Originator:  Section 11104.
   Originator's bank:  Section 11104.
   Payment by beneficiary's bank to beneficiary:  Section 11405.
   Payment by originator to beneficiary:  Section 11406.
   Payment by sender to receiving bank:  Section 11403.
   Payment date:  Section 11401.
   Payment order:  Section 11103.
   Receiving bank:  Section 11103.
   Security procedure:  Section 11201.
   Sender:  Section 11103.
   (c) The following definitions in Division 4 (commencing with
Section 4101) apply to this division:
   Clearinghouse:  Section 4104.
   Item:  Section 4104.
   Suspends payments:  Section 4104.
   (d) In addition Division 1 (commencing with Section 1101) contains
general definitions and principles of construction and
interpretation applicable throughout this division.

11106.  (a) The time of receipt of a payment order or communication
canceling or amending a payment order is determined by the rules
applicable to receipt of a notice stated in subdivision (27) of
Section 1201.  A receiving bank may fix a cutoff time or times on a
funds-transfer business day for the receipt and processing of payment
orders and communications canceling or amending payment orders.
Different cutoff times may apply to payment orders, cancellations, or
amendments, or to different categories of payment orders,
cancellations, or amendments. A cutoff time may apply to senders
generally or different cutoff times may apply to different senders or
categories of payment orders.  If a payment order or communication
canceling or amending a payment order is received after the close of
a funds-transfer business day or after the appropriate cutoff time on
a funds-transfer business day, the receiving bank may treat the
payment order or communication as received at the opening of the next
funds-transfer business day.
   (b) If this division refers to an execution date or payment date
or states a day on which a receiving bank is required to take action,
and the date or day does not fall on a funds-transfer business day,
the next day that is a funds-transfer business day is treated as the
date or day stated, unless the contrary is stated in this division.

11107.  Regulations of the Board of Governors of the Federal Reserve
System and operating circulars of the Federal Reserve Banks
supersede any inconsistent provision of this division to the extent
of the inconsistency.

11108.  This division does not apply to a funds transfer any part of
which is governed by the Electronic Fund Transfer Act of 1978 (Title
XX, Public Law 95-630, 92 Stat. 3728, 15 U.S.C. Sec. 1693 et seq.)
as amended from time to time.

11201.  "Security procedure" means a procedure established by
agreement of a customer and a receiving bank for the purpose of (i)
verifying that a payment order or communication amending or canceling
a payment order is that of the customer, or (ii) detecting error in
the transmission or the content of the payment order or
communication.  A security procedure may require the use of
algorithms or other codes, identifying words or numbers, encryption,
callback procedures, or similar security devices.  Comparison of a
signature on a payment order or communication with an authorized
specimen signature of the customer is not by itself a security
procedure.

11202.  (a) A payment order received by the receiving bank is the
authorized order of the person identified as sender if that person
authorized the order or is otherwise bound by it under the law of
agency.
   (b) If a bank and its customer have agreed that the authenticity
of payment orders issued to the bank in the name of the customer as
sender will be verified pursuant to a security procedure, a payment
order received by the receiving bank is effective as the order of the
customer, whether or not authorized, if (i) the security procedure
is a commercially reasonable method of providing security against
unauthorized payment orders, and (ii) the bank proves that it
accepted the payment order in good faith and in compliance with the
security procedure and any written agreement or instruction of the
customer restricting acceptance of payment orders issued in the name
of the customer.  The bank is not required to follow an instruction
that violates a written agreement with the customer or notice of
which is not received at a time and in a manner affording the bank a
reasonable opportunity to act on it before the payment order is
accepted.
   (c) Commercial reasonableness of a security procedure is a
question of law to be determined by considering the wishes of the
customer expressed to the bank, the circumstances of the customer
known to the bank, including the size, type, and frequency of payment
orders normally issued by the customer to the bank, alternative
security procedures offered to the customer, and security procedures
in general use by customers and receiving banks similarly situated. A
security procedure is deemed to be commercially reasonable if (i)
the security procedure was chosen by the customer after the bank
offered, and the customer refused, a security procedure that was
commercially reasonable for that customer, and (ii) the customer
expressly agreed in writing to be bound by any payment order, whether
or not authorized, issued in its name and accepted by the bank in
compliance with the security procedure chosen by the customer.
   (d) The term "sender" in this division includes the customer in
whose name a payment order is issued if the order is the authorized
order of the customer under subdivision (a), or it is effective as
the order of the customer under subdivision (b).
   (e) This section applies to amendments and cancellations of
payment orders to the same extent it applies to payment orders.
   (f) Except as provided in this section and in paragraph (1) of
subdivision (a) of Section 11203, rights and obligations arising
under this section or Section 11203 may not be varied by agreement.

11203.  (a) If an accepted payment order is not, under subdivision
(a) of Section 11202, an authorized order of a customer identified as
sender, but is effective as an order of the customer pursuant to
subdivision (b) of Section 11202, the following rules apply:
   (1) By express written agreement, the receiving bank may limit the
extent to which it is entitled to enforce or retain payment of the
payment order.
   (2) The receiving bank is not entitled to enforce or retain
payment of the payment order if the customer proves that the order
was not caused, directly or indirectly, by a person (i) entrusted at
any time with duties to act for the customer with respect to payment
orders or the security procedure, or (ii) who obtained access to
transmitting facilities of the customer or who obtained, from a
source controlled by the customer and without authority of the
receiving bank, information facilitating breach of the security
procedure, regardless of how the information was obtained or whether
the customer was at fault.  Information includes any access device,
computer software, or the like.
   (b) This section applies to amendments of payment orders to the
same extent it applies to payment orders.

11204.  (a) If a receiving bank accepts a payment order issued in
the name of its customer as sender which is (i) not authorized and
not effective as the order of the customer under Section 11202, or
(ii) not enforceable, in whole or in part, against the customer under
Section 11203, the bank shall refund any payment of the payment
order received from the customer to the extent the bank is not
entitled to enforce payment and shall pay interest on the refundable
amount calculated from the date the bank received payment to the date
of the refund.  However, the customer is not entitled to interest
from the bank on the amount to be refunded if the customer fails to
exercise ordinary care to determine that the order was not authorized
by the customer and to notify the bank of the relevant facts within
a reasonable time not exceeding 90 days after the date the customer
received notification from the bank that the order was accepted or
that the customer's account was debited with respect to the order.
The bank is not entitled to any recovery from the customer on account
of a failure by the customer to give notification as stated in this
section.
   (b) Reasonable time under subdivision (a) may be fixed by
agreement as stated in subdivision (1) of Section 1204, but the
obligation of a receiving bank to refund payment as stated in
subdivision (a) may not otherwise be varied by agreement.

11205.  (a) If an accepted payment order was transmitted pursuant to
a security procedure for the detection of error and the payment
order (i) erroneously instructed payment to a beneficiary not
intended by the sender, (ii) erroneously instructed payment in an
amount greater than the amount intended by the sender, or (iii) was
an erroneously transmitted duplicate of a payment order previously
sent by the sender, the following rules apply:
   (1) If the sender proves that the sender or a person acting on
behalf of the sender pursuant to Section 11206 complied with the
security procedure and that the error would have been detected if the
receiving bank had also complied, the sender is not obliged to pay
the order to the extent stated in paragraphs (2) and (3).
   (2) If the funds transfer is completed on the basis of an
erroneous payment order described in clause (i) or (iii) of this
subdivision, the sender is not obliged to pay the order and the
receiving 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.
   (3) If the funds transfer is completed on the basis of a payment
order described in clause (ii) of this subdivision, the sender is not
obliged to pay the order to the extent the amount received by the
beneficiary is greater than the amount intended by the sender.  In
that case, the receiving bank is entitled to recover from the
beneficiary the excess amount received to the extent allowed by the
law governing mistake and restitution.
   (b) If (i) the sender of an erroneous payment order described in
subdivision (a) is not obliged to pay all or part of the order, and
(ii) the sender receives notification from the receiving bank that
the order was accepted by the bank or that the sender's account was
debited with respect to the order, the sender has a duty to exercise
ordinary care, on the basis of information available to the sender,
to discover the error with respect to the order and to advise the
bank of the relevant facts within a reasonable time, not exceeding 90
days, after the bank's notification was received by the sender.  If
the bank proves that the sender failed to perform that duty, the
sender is liable to the bank for the loss the bank proves it incurred
as a result of the failure, but the liability of the sender may not
exceed the amount of the sender's order.
   (c) This section applies to amendments to payment orders to the
same extent it applies to payment orders.

11206.  (a) If a payment order addressed to a receiving bank is
transmitted to a funds-transfer system or other third-party
communication system for transmittal to the bank, the system is
deemed to be an agent of the sender for the purpose of transmitting
the payment order to the bank.  If there is a discrepancy between the
terms of the payment order transmitted to the system and the terms
of the payment order transmitted by the system to the bank, the terms
of the payment order of the sender are those transmitted by the
system.  This section does not apply to a funds-transfer system of
the Federal Reserve Banks.
   (b) This section applies to cancellations and amendments of
payment orders to the same extent it applies to payment orders.

11207.  (a) Subject to subdivision (b), if, in a payment order
received by the beneficiary's bank, the name, bank account number, or
other identification of the beneficiary refers to a nonexistent or
unidentifiable person or account, no person has rights as a
beneficiary of the order and acceptance of the order cannot occur.
   (b) If a payment order received by the beneficiary's bank
identifies the beneficiary both by name and by an identifying or bank
account number and the name and number identify different persons,
the following rules apply:
   (1) Except as otherwise provided in subdivision (c), if the
beneficiary's bank does not know that the name and number refer to
different persons, it may rely on the number as the proper
identification of the beneficiary of the order.  The beneficiary's
bank need not determine whether the name and number refer to the same
person.
   (2) If the beneficiary's bank pays the person identified by name
or knows that the name and number identify different persons, no
person has rights as beneficiary except the person paid by the
beneficiary's bank if that person was entitled to receive payment
from the originator of the funds transfer.  If no person has rights
as beneficiary, acceptance of the order cannot occur.
   (c) If (i) a payment order described in subdivision (b) is
accepted, (ii) the originator's payment order described the
beneficiary inconsistently by name and number, and (iii) the
beneficiary's bank pays the person identified by number as permitted
by paragraph (1) of subdivision (b), the following rules apply:
   (1) If the originator is a bank, the originator is obliged to pay
its order.
   (2) If the originator is not a bank and proves that the person
identified by number was not entitled to receive payment from the
originator, the originator is not obliged to pay its order unless the
originator's bank proves that the originator, before acceptance of
the originator's order, had notice that payment of a payment order
issued by the originator might be made by the beneficiary's bank on
the basis of an identifying or bank account number even if it
identifies a person different from the named beneficiary.  Proof of
notice may be made by any admissible evidence.  The originator's bank
satisfies the burden of proof if it proves that the originator,
before the payment order was accepted, signed a writing stating the
information to which the notice relates.
   (d) In a case governed by paragraph (1) of subdivision (b), if the
beneficiary's bank rightfully pays the person identified by number
and that person was not entitled to receive payment from the
originator, the amount paid may be recovered from that person to the
extent allowed by the law governing mistake and restitution as
follows:
   (1) If the originator is obliged to pay its payment order as
stated in subdivision (c), the originator has the right to recover.
   (2) If the originator is not a bank and is not obliged to pay its
payment order, the originator's bank has the right to recover.

11208.  (a) This subdivision applies to a payment order identifying
an intermediary bank or the beneficiary's bank only by an identifying
number.
   (1) The receiving bank may rely on the number as the proper
identification of the intermediary or beneficiary's bank and need not
determine whether the number identifies a bank.
   (2) The sender is obliged to compensate the receiving bank for any
loss and expenses incurred by the receiving bank as a result of its
reliance on the number in executing or attempting to execute the
order.
   (b) This subdivision applies to a payment order identifying an
intermediary bank or the beneficiary's bank both by name and an
identifying number if the name and number identify different persons.

   (1) If the sender is a bank, the receiving bank may rely on the
number as the proper identification of the intermediary or
beneficiary's bank if the receiving bank, when it executes the sender'
s order, does not know that the name and number identify different
persons.  The receiving bank need not determine whether the name and
number refer to the same person or whether the number refers to a
bank.  The sender is obliged to compensate the receiving bank for any
loss and expenses incurred by the receiving bank as a result of its
reliance on the number in executing or attempting to execute the
order.
   (2) If the sender is not a bank and the receiving bank proves that
the sender, before the payment order was accepted, had notice that
the receiving bank might rely on the number as the proper
identification of the intermediary or beneficiary's bank even if it
identifies a person different from the bank identified by name, the
rights and obligations of the sender and the receiving bank are
governed by paragraph (1) of subdivision (b), as though the sender
were a bank.  Proof of notice may be made by any admissible evidence.
  The receiving bank satisfies the burden of proof if it proves that
the sender, before the payment order was accepted, signed a writing
stating the information to which the notice relates.
   (3) Regardless of whether the sender is a bank, the receiving bank
may rely on the name as the proper identification of the
intermediary or beneficiary's bank if the receiving bank, at the time
it executes the sender's order, does not know that the name and
number identify different persons.  The receiving bank need not
determine whether the name and number refer to the same person.
   (4) If the receiving bank knows that the name and number identify
different persons, reliance on either the name or the number in
executing the sender's payment order is a breach of the obligation
stated in paragraph (1) of subdivision (a) of Section 11302.

11209.  (a) Subject to subdivision (d), a receiving bank other than
the beneficiary's bank accepts a payment order when it executes the
order.
   (b) Subject to subdivisions (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
subdivision (a) or (b) of Section 11405, 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 paragraph (1) or (2) of subdivision (a) of
Section 11403.
   (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
paragraph (2) or (3) of subdivision (b) 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 subdivision (b) of Section
11211, the bank may recover from the beneficiary any payment
received to the extent allowed by the law governing mistake and
restitution.

11210.  (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 in 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, (i)
any means complying with the agreement is reasonable and (ii) 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 subdivision 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 subdivision (d) of Section 11211 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.

11211.  (a) A communication of the sender of a payment order
canceling 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 subdivision (a), a communication by the sender
canceling 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 paragraph (2) of subdivision (c).

11212.  If a receiving bank fails to accept a payment order that it
is obliged by express agreement to accept, the bank is liable for
breach of the agreement to the extent provided in the agreement or in
this division, but does not otherwise have any duty to accept a
payment order or, before acceptance, to take any action, or refrain
from taking action, with respect to the order except as provided in
this division or by express agreement.  Liability based on acceptance
arises only when acceptance occurs as stated in Section 11209, and
liability is limited to that provided in this division.  A receiving
bank is not the agent of the sender or beneficiary of the payment
order it accepts, or of any other party to the funds transfer, and
the bank owes no duty to any party to the funds transfer except as
provided in this division or by express agreement.

11301.  (a) A payment order is "executed" by the receiving bank when
it issues a payment order intended to carry out the payment order
received by the bank.  A payment order received by the beneficiary's
bank can be accepted but cannot be executed.
   (b) "Execution date" of a payment order means the day on which the
receiving bank may properly issue a payment order in execution of
the sender's order.  The execution date may be determined by
instruction of the sender but cannot be earlier than the day the
order is received and, unless otherwise determined, is the day the
order is received.  If the sender's instruction states a payment
date, the execution date is the payment date or an earlier date on
which execution is reasonably necessary to allow payment to the
beneficiary on the payment date.

11302.  (a) Except as provided in subdivisions (b) to (d),
inclusive, if the receiving bank accepts a payment order pursuant to
subdivision (a) of Section 11209, the bank has the following
obligations in executing the order:
   (1) The receiving bank is obliged to issue, on the execution date,
a payment order complying with the sender's order and to follow the
sender's instructions concerning (i) any intermediary bank or
funds-transfer system to be used in carrying out the funds transfer,
or (ii) the means by which payment orders are to be transmitted in
the funds transfer.  If the originator's bank issues a payment order
to an intermediary bank, the originator's bank is obliged to instruct
the intermediary bank according to the instruction of the
originator. An intermediary bank in the funds transfer is similarly
bound by an instruction given to it by the sender of the payment
order it accepts.
   (2) If the sender's instruction states that the funds transfer is
to be carried out telephonically or by wire transfer or otherwise
indicates that the funds transfer is to be carried out by the most
expeditious means, the receiving bank is obliged to transmit its
payment order by the most expeditious available means, and to
instruct any intermediary bank accordingly.  If a sender's
instruction states a payment date, the receiving bank is obliged to
transmit its payment order at a time and by means reasonably
necessary to allow payment to the beneficiary on the payment date or
as soon thereafter as is feasible.
   (b) Unless otherwise instructed, a receiving bank executing a
payment order may (i) use any funds-transfer system if use of that
system is reasonable in the circumstances, and (ii) issue a payment
order to the beneficiary's bank or to an intermediary bank through
which a payment order conforming to the sender's order can
expeditiously be issued to the beneficiary's bank if the receiving
bank exercises ordinary care in the selection of the intermediary
bank.  A receiving bank is not required to follow an instruction of
the sender designating a funds-transfer system to be used in carrying
out the funds transfer if the receiving bank, in good faith,
determines that it is not feasible to follow the instruction or that
following the instruction would unduly delay completion of the funds
transfer.
   (c) Unless paragraph (2) of subdivision (a) applies or the
receiving bank is otherwise instructed, the bank may execute a
payment order by transmitting its payment order by first-class mail
or by any means reasonable in the circumstances.  If the receiving
bank is instructed to execute the sender's order by transmitting its
payment order by a particular means, the receiving bank may issue its
payment order by the means stated or by any means as expeditious as
the means stated.
   (d) Unless instructed by the sender, (i) the receiving bank may
not obtain payment of its charges for services and expenses in
connection with the execution of the sender's order by issuing a
payment order in an amount equal to the amount of the sender's order
less the amount of the charges, and (ii) may not instruct a
subsequent receiving bank to obtain payment of its charges in the
same manner.

11303.  (a) A receiving bank that (i) executes the payment order of
the sender by issuing a payment order in an amount greater than the
amount of the sender's order, or (ii) issues a payment order in
execution of the sender's order and then issues a duplicate order, is
entitled to payment of the amount of the sender's order under
subdivision (c) of Section 11402 if that subdivision is otherwise
satisfied.  The bank is entitled to recover from the beneficiary of
the erroneous order the excess payment received to the extent allowed
by the law governing mistake and restitution.
   (b) A receiving bank that executes the payment order of the sender
by issuing a payment order in an amount less than the amount of the
sender's order is entitled to payment of the amount of the sender's
order under subdivision (c) of Section 11402 if (i) that subdivision
is otherwise satisfied and (ii) the bank corrects its mistake by
issuing an additional payment order for the benefit of the
beneficiary of the sender's order.  If the error is not corrected,
the issuer of the erroneous order is entitled to receive or retain
payment from the sender of the order it accepted only to the extent
of the amount of the erroneous order.  This subdivision does not
apply if the receiving bank executes the sender's payment order by
issuing a payment order in an amount less than the amount of the
sender's order for the purpose of obtaining payment of its charges
for services and expenses pursuant to instruction of the sender.
   (c) If a receiving bank executes the payment order of the sender
by issuing a payment order to a beneficiary different from the
beneficiary of the sender's order and the funds transfer is completed
on the basis of that error, the sender of the payment order that was
erroneously executed and all previous senders in the funds transfer
are not obliged to pay the payment orders they issued.  The issuer of
the erroneous order is entitled to recover from the beneficiary of
the order the payment received to the extent allowed by the law
governing mistake and restitution.

11304.  If the sender of a payment order that is erroneously
executed as stated in Section 11303 receives notification from the
receiving bank that the order was executed or that the sender's
account was debited with respect to the order, the sender has a duty
to exercise ordinary care to determine, on the basis of information
available to the sender, that the order was erroneously executed and
to notify the bank of the relevant facts within a reasonable time not
exceeding 90 days after the notification from the bank was received
by the sender.  If the sender fails to perform that duty, the bank is
not obliged to pay interest on any amount refundable to the sender
under subdivision (d) of Section 11402 for the period before the bank
learns of the execution error.  The bank is not entitled to any
recovery from the sender on account of a failure by the sender to
perform the duty stated in this section.

11305.  (a) If a funds transfer is completed but execution of a
payment order by the receiving bank in breach of Section 11302
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 in subdivision (c), additional damages
are not recoverable.
   (b) If execution of a payment order by a receiving bank in breach
of Section 11302 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 subdivision (a), resulting from the improper execution.
Except as provided in subdivision (c), additional damages are not
recoverable.
   (c) In addition to the amounts payable under subdivisions (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 subdivision (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 subdivision (d) and the agreement does not provide
for damages, reasonable attorney's fees are recoverable if demand
for compensation under subdivision (d) is made and refused before an
action is brought on the claim.
   (f) Except as stated in this section, the liability of a receiving
bank under subdivisions (a) and (b) may not be varied by agreement.

11401.  "Payment date" of a payment order means the day on which the
amount of the order is payable to the beneficiary by the beneficiary'
s bank.  The payment date may be determined by instruction of the
sender but cannot be earlier than the day the order is received by
the beneficiary's bank and, unless otherwise determined, is the day
the order is received by the beneficiary's bank.

11402.  (a) This section is subject to Sections 11205 and 11207.
   (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 subdivision is subject to subdivision (e) and to Section
11303. 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 in Sections 11204 and 11304,
interest is payable on the refundable amount from the date of
payment.
   (e) If a funds transfer is not completed as stated in subdivision
(c) and an intermediary bank is obliged to refund payment as stated
in subdivision (d) but is unable to do so because it is 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 stated in paragraph (1) of subdivision (a) of
Section 11302, 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 refund as stated in subdivision (d).
   (f) The right of the sender of a payment order to be excused from
the obligation to pay the order as stated in subdivision (c) or to
receive refund under subdivision (d) may not be varied by agreement.

11403.  (a) Payment of the sender's obligation under Section 11402
to pay the receiving bank occurs as follows:
   (1) If the sender is a bank, payment occurs when the receiving
bank receives final settlement of the obligation through a Federal
Reserve Bank or through a funds-transfer system.
   (2) If the sender is a bank and the sender (i) credited an account
of the receiving bank with the sender, or (ii) caused an account of
the receiving bank in another bank to be credited, payment occurs
when the credit is withdrawn or, if not withdrawn, at midnight of the
day on which the credit is withdrawable and the receiving bank
learns of that fact.
   (3) If the receiving bank debits an account of the sender with the
receiving bank, payment occurs when the debit is made to the extent
the debit is covered by a withdrawable credit balance in the account.

   (b) If the sender and receiving bank are members of a
funds-transfer system that nets obligations multilaterally among
participants, the receiving bank receives final settlement when
settlement is complete in accordance with the rules of the system.
The obligation of the sender to pay the amount of a payment order
transmitted through the funds-transfer system may be satisfied, to
the extent permitted by the rules of the system, by setting off and
applying against the sender's obligation the right of the sender to
receive payment from the receiving bank of the amount of any other
payment order transmitted to the sender by the receiving bank through
the funds-transfer system.  The aggregate balance of obligations
owed by each sender to each receiving bank in the funds-transfer
system may be satisfied, to the extent permitted by the rules of the
system, by setting off and applying against that balance the
aggregate balance of obligations owed to the sender by other members
of the system.  The aggregate balance is determined after the right
of setoff stated in the second sentence of this subdivision has been
exercised.
   (c) If two banks transmit payment orders to each other under an
agreement that settlement of the obligations of each bank to the
other under Section 11402 will be made at the end of the day or other
period, the total amount owed with respect to all orders transmitted
by one bank shall be set off against the total amount owed with
respect to all orders transmitted by the other bank.  To the extent
of the setoff, each bank has made payment to the other.
   (d) In a case not covered by subdivision (a), the time when
payment of the sender's obligation under subdivision (b) or (c) of
Section 11402 occurs is governed by applicable principles of law that
determine when an obligation is satisfied.

11404.  (a) Subject to subdivision (e) of Section 11211, and
subdivisions (d) and (e) of Section 11405, if a beneficiary's bank
accepts a payment order, the bank is obliged to pay the amount of the
order to the beneficiary of the order.  Payment is due on the
payment date of the order, but if acceptance occurs on the payment
date after the close of the funds-transfer business day of the bank,
payment is due on the next funds-transfer business day.  If the bank
refuses to pay after demand by the beneficiary and receipt of notice
of particular circumstances that will give rise to consequential
damages as a result of nonpayment, the beneficiary may recover
damages resulting from the refusal to pay to the extent the bank had
notice of the damages, unless the bank proves that it did not pay
because of a reasonable doubt concerning the right of the beneficiary
to payment.
   (b) If a payment order accepted by the beneficiary's bank
instructs payment to an account of the beneficiary, the bank is
obliged to notify the beneficiary of receipt of the order before
midnight of the next funds-transfer business day following the
payment date.  If the payment order does not instruct payment to an
account of the beneficiary, the bank is required to notify the
beneficiary only if notice is required by the order.  Notice may be
given by first-class mail or any other means reasonable in the
circumstances. If the bank fails to give the required notice, the
bank is obliged to pay interest to the beneficiary on the amount of
the payment order from the day notice should have been given until
the day the beneficiary learned of receipt of the payment order by
the bank.  No other damages are recoverable.  Reasonable attorney's
fees are also recoverable if demand for interest is made and refused
before an action is brought on the claim.
   (c) The right of a beneficiary to receive payment and damages as
stated in subdivision (a) may not be varied by agreement or a
funds-transfer system rule.  The right of a beneficiary to be
notified as stated in subdivision (b) may be varied by agreement of
the beneficiary or by a funds-transfer system rule if the beneficiary
is notified of the rule before initiation of the funds transfer.

11405.  (a) If the beneficiary's bank credits an account of the
beneficiary of a payment order, payment of the bank's obligation
under subdivision (a) of Section 11404 occurs when and to the extent
(i) the beneficiary is notified of the right to withdraw the credit,
(ii) the bank lawfully applies the credit to a debt of the
beneficiary, or (iii) funds with respect to the order are otherwise
made available to the beneficiary by the bank.
   (b) If the beneficiary's bank does not credit an account of the
beneficiary of a payment order, the time when payment of the bank's
obligation under subdivision (a) of Section 11404 occurs is governed
by principles of law that determine when an obligation is satisfied.

   (c) Except as stated in subdivisions (d) and (e), if the
beneficiary's bank pays the beneficiary of a payment order under a
condition to payment or agreement of the beneficiary giving the bank
the right to recover payment from the beneficiary if the bank does
not receive payment of the order, the condition to payment or
agreement is not enforceable.
   (d) A funds-transfer system rule may provide that payments made to
beneficiaries of funds transfers made through the system are
provisional until receipt of payment by the beneficiary's bank of the
payment order it accepted. A beneficiary's bank that makes a payment
that is provisional under the rule is entitled to refund from the
beneficiary if (i) the rule requires that both the beneficiary and
the originator be given notice of the provisional nature of the
payment before the funds transfer is initiated, (ii) the beneficiary,
the beneficiary's bank and the originator's bank agreed to be bound
by the rule, and (iii) the beneficiary's bank did not receive payment
of the payment order that it accepted.  If the beneficiary is
obliged to refund payment to the beneficiary's bank, acceptance of
the payment order by the beneficiary's bank is nullified and no
payment by the originator of the funds transfer to the beneficiary
occurs under Section 11406.
   (e) This subdivision applies to a funds transfer that includes a
payment order transmitted over a funds-transfer system that (i) nets
obligations multilaterally among participants, and (ii) has in effect
a loss-sharing agreement among participants for the purpose of
providing funds necessary to complete settlement of the obligations
of one or more participants that do not meet their settlement
obligations.  If the beneficiary's bank in the funds transfer accepts
a payment order and the system fails to complete settlement pursuant
to its rules with respect to any payment order in the funds
transfer, (i) the acceptance by the beneficiary's bank is nullified
and no person has any right or obligation based on the acceptance,
(ii) the beneficiary's bank is entitled to recover payment from the
beneficiary, (iii) no payment by the originator to the beneficiary
occurs under Section 11406, and (iv) subject to subdivision (e) of
Section 11402, each sender in the funds transfer is excused from its
obligation to pay its payment order under subdivision (c) of Section
11402 because the funds transfer has not been completed.

11406.  (a) Subject to subdivision (e) of Section 11211 and
subdivisions (d) and (e) of Section 11405, the originator of a funds
transfer pays the beneficiary of the originator's payment order (i)
at the time a payment order for the benefit of the beneficiary is
accepted by the beneficiary's bank in the funds transfer and (ii) in
an amount equal to the amount of the order accepted by the
beneficiary's bank, but not more than the amount of the originator's
order.
   (b) If payment under subdivision (a) is made to satisfy an
obligation, the obligation is discharged to the same extent discharge
would result from payment to the beneficiary of the same amount in
money, unless (i) the payment under subdivision (a) was made by a
means prohibited by the contract of the beneficiary with respect to
the obligation, (ii) the beneficiary, within a reasonable time after
receiving notice of receipt of the order by the beneficiary's bank,
notified the originator of the beneficiary's refusal of the payment,
(iii) funds with respect to the order were not withdrawn by the
beneficiary or applied to a debt of the beneficiary, and (iv) the
beneficiary would suffer a loss that could reasonably have been
avoided if payment had been made by a means complying with the
contract. If payment by the originator does not result in discharge
under this section, the originator is subrogated to the rights of the
beneficiary to receive payment from the beneficiary's bank under
subdivision (a) of Section 11404.
   (c) For the purpose of determining whether discharge of an
obligation occurs under subdivision (b), if the beneficiary's bank
accepts a payment order in an amount equal to the amount of the
originator's payment order less charges of one or more receiving
banks in the funds transfer, payment to the beneficiary is deemed to
be in the amount of the originator's order unless upon demand by the
beneficiary the originator does not pay the beneficiary the amount of
the deducted charges.
   (d) Rights of the originator or of the beneficiary of a funds
transfer under this section may be varied only by agreement of the
originator and the beneficiary.

11501.  (a) Except as otherwise provided in this division, the
rights and obligations of a party to a funds transfer may be varied
by agreement of the affected party.
   (b) "Funds-transfer system rule" means a rule of an association of
banks (i) governing transmission of payment orders by means of a
funds-transfer system of the association or rights and obligations
with respect to those orders, or (ii) to the extent the rule governs
rights and obligations between banks that are parties to a funds
transfer in which a Federal Reserve Bank, acting as an intermediary
bank, sends a payment order to the beneficiary's bank.  Except as
otherwise provided in this division, a funds-transfer system rule
governing rights and obligations between participating banks using
the system may be effective even if the rule conflicts with this
division and indirectly affects another party to the funds transfer
who does not consent to the rule.  A funds-transfer system rule may
also govern rights and obligations of parties other than
participating banks using the system to the extent stated in
subdivision (c) of Section 11404, subdivision (d) of Section 11405,
and subdivision (c) of Section 11507.

11502.  (a) As used in this section, "creditor process" means levy,
attachment, garnishment, notice of lien, sequestration, or similar
process issued by or on behalf of a creditor or other claimant with
respect to an account.
   (b) This subdivision applies to creditor process with respect to
an authorized account of the sender of a payment order if the
creditor process is served on the receiving bank.  For the purpose of
determining rights with respect to the creditor process, if the
receiving bank accepts the payment order the balance in the
authorized account is deemed to be reduced by the amount of the
payment order to the extent the bank did not otherwise receive
payment of the order, unless the creditor process is served at a time
and in a manner affording the bank a reasonable opportunity to act
on it before the bank accepts the payment order.
   (c) If a beneficiary's bank has received a payment order for
payment to the beneficiary's account in the bank, the following rules
apply:
   (1) The bank may credit the beneficiary's account.  The amount
credited may be set off against an obligation owed by the beneficiary
to the bank or may be applied to satisfy creditor process served on
the bank with respect to the account.
   (2) The bank may credit the beneficiary's account and allow
withdrawal of the amount credited unless creditor process with
respect to the account is served at a time and in a manner affording
the bank a reasonable opportunity to act to prevent withdrawal.
   (3) If creditor process with respect to the beneficiary's account
has been served and the bank has had a reasonable opportunity to act
on it, the bank may not reject the payment order except for a reason
unrelated to the service of process.
   (d) Creditor process with respect to a payment by the originator
to the beneficiary pursuant to a funds transfer may be served only on
the beneficiary's bank with respect to the debt owed by that bank to
the beneficiary.  Any other bank served with the creditor process is
not obliged to act with respect to the process.

11503.  For proper cause and in compliance with applicable law, a
court may restrain (i) a person from issuing a payment order to
initiate a funds transfer, (ii) an originator's bank from executing
the payment order of the originator, or (iii) the beneficiary's bank
from releasing funds to the beneficiary or the beneficiary from
withdrawing the funds.  A court may not otherwise restrain a person
from issuing a payment order, paying or receiving payment of a
payment order, or otherwise acting with respect to a funds transfer.

11504.  (a) If a receiving bank has received more than one payment
order of the sender or one or more payment orders and other items
that are payable from the sender's account, the bank may charge the
sender's account with respect to the various orders and items in any
sequence.
   (b) In determining whether a credit to an account has been
withdrawn by the holder of the account or applied to a debt of the
holder of the account, credits first made to the account are first
withdrawn or applied.

11505.  If a receiving bank has received payment from its customer
with respect to a payment order issued in the name of the customer as
sender and accepted by the bank, and the customer received
notification reasonably identifying the order, the customer is
precluded from asserting that the bank is not entitled to retain the
payment unless the customer notifies the bank of the customer's
objection to the payment within one year after the notification was
received by the customer.

11506.  (a) If, under this division, a receiving bank is obliged to
pay interest with respect to a payment order issued to the bank, the
amount payable may be determined (i) by agreement of the sender and
receiving bank, or (ii) by a funds-transfer system rule if the
payment order is transmitted through a funds-transfer system.
   (b) If the amount of interest is not determined by an agreement or
rule as stated in subdivision (a), the amount is calculated by
multiplying the applicable federal funds rate by the amount on which
interest is payable, and then multiplying the product by the number
of days for which interest is payable.  The applicable federal funds
rate is the average of the federal funds rates published by the
Federal Reserve Bank of New York for each of the days for which
interest is payable divided by 360.  The federal funds rate for any
day on which a published rate is not available is the same as the
published rate for the next preceding day for which there is a
published rate.  If a receiving bank that accepted a payment order is
required to refund payment to the sender of the order because the
funds transfer was not completed, but the failure to complete was not
due to any fault by the bank, the interest payable is reduced by a
percentage equal to the reserve requirement on deposits of the
receiving bank.

11507.  (a) The following rules apply unless the affected parties
otherwise agree or subdivision (c) applies:
   (1) The rights and obligations between the sender of a payment
order and the receiving bank are governed by the law of the
jurisdiction in which the receiving bank is located.
   (2) The rights and obligations between the beneficiary's bank and
the beneficiary are governed by the law of the jurisdiction in which
the beneficiary's bank is located.
   (3) The issue of when payment is made pursuant to a funds transfer
by the originator to the beneficiary is governed by the law of the
jurisdiction in which the beneficiary's bank is located.
   (b) If the parties described in each paragraph of subdivision (a)
have made an agreement selecting the law of a particular jurisdiction
to govern rights and obligations between each other, the law of that
jurisdiction governs those rights and obligations, whether or not
the payment order or the funds transfer bears a reasonable relation
to that jurisdiction.
   (c) A funds-transfer system rule may select the law of a
particular jurisdiction to govern (i) rights and obligations between
participating banks with respect to payment orders transmitted or
processed through the system, or (ii) the rights and obligations of
some or all parties to a funds transfer any part of which is carried
out by means of the system.  A choice of law made pursuant to clause
(i) is binding on participating banks.  A choice of law made pursuant
to clause (ii) is binding on the originator, other sender, or a
receiving bank having notice that the funds-transfer system might be
used in the funds transfer and of the choice of law by the system
when the originator, other sender, or receiving bank issued or
accepted a payment order.  The beneficiary of a funds transfer is
bound by the choice of law if, when the funds transfer is initiated,
the beneficiary has notice that the funds-transfer system might be
used in the funds transfer and of the choice of law by the system.
The law of a jurisdiction selected pursuant to this subdivision may
govern, whether or not that law bears a reasonable relation to the
matter in issue.
   (d) In the event of inconsistency between an agreement under
subdivision (b) and a choice-of-law rule under subdivision (c), the
agreement under subdivision (b) prevails.
   (e) If a funds transfer is made by use of more than one
funds-transfer system and there is inconsistency between
choice-of-law rules of the systems, the matter in issue is governed
by the law of the selected jurisdiction that has the most significant
relationship to the matter in issue.