Chapter 490 — Chapter 490

PART 4. RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER §490:4-401 When bank may charge customer's account. (a) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly…

§490:4-402 Bank's liability to customer for wrongful dishonor; time of determining insufficiency of account. (a) Except as otherwise provided in this article, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an it…

§490:4-403 Customer's right to stop payment; burden of proof of loss. (a) A customer or any person authorized to draw on the account if there is more than one person may stop payment of any item drawn on the customer's account or close the account by an order to the bank describi…

§490:4-404 Bank not obligated to pay check more than six months old. A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months after its date, but it may charge its customer's accoun…

§490:4-405 Death or incompetence of customer. (a) A payor or collecting bank's authority to accept, pay, or collect an item or to account for proceeds of its collection, if otherwise effective, is not rendered ineffective by incompetence of a customer of either bank existing at t…

§490:4-406 Customer's duty to discover and report unauthorized signature or alteration. (a) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or p…

§490:4-407 Payor bank's right to subrogation on improper payment. If a payor bank has paid an item over the order of the drawer or maker to stop payment, or after an account has been closed, or otherwise under circumstances giving a basis for objection by the drawer or maker, to …

PART 5. COLLECTION OF DOCUMENTARY DRAFTS §490:4-501 Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor. A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and…

§490:4-502 Presentment of "on arrival" drafts. If a draft or the relevant instructions require presentment "on arrival", "when goods arrive" or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to …

§490:4-503 Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of need. Unless otherwise instructed and except as provided in article 5, a bank presenting a documentary draft: However, the presenting bank is under no obligati…

§490:4-504 Privilege of presenting bank to deal with goods; security interest for expenses. (a) A presenting bank that, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell, or othe…

ARTICLE 4A. FUNDS TRANSFERS PART 1. SUBJECT MATTER AND DEFINITIONS §490:4A-101 Short title. This article may be cited as Uniform Commercial Code -- Funds Transfers. [L 1991, c 41, pt of §1]

§490:4A-102 Subject matter. Except as otherwise provided in section 490:4A-108, this article applies to funds transfers defined in section 490:4A-104. [L 1991, c 41, pt of §1]

§490:4A-103 Payment order--definitions. (a) In this article: "Beneficiary" means the person to be paid by the beneficiary's bank. "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 th…

§490:4A-104 Funds transfer--definitions. In this article:

§490:4A-105 Other definitions. (a) In this article: (b) Other definitions applying to this article and the sections in which they appear are: "Acceptance". Section 490:4A-209. "Beneficiary". Section 490:4A-103. "Beneficiary's bank". Section 490:4A-103. "Executed". Section 490:4A-…

§490:4A-106 Time payment order is received. (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 section 490:1-202. A receiving bank may fix a cut-off time or times…

§490:4A-107 Federal reserve regulations and operating circulars. 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 article to the extent of the inconsistency. [L 19…

§490:4A-108 Relationship to Electronic Fund Transfer Act. (a) Except as provided in subsection (b), this article 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. §16…

PART 2. ISSUE AND ACCEPTANCE OF PAYMENT ORDER §490:4A-201 Security procedure. "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 …

§490:4A-202 Authorized and verified payment orders. (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 custome…

§490:4A-203 Unenforceability of certain verified payment orders. (a) If an accepted payment order is not, under section 490:4A-202(a), an authorized order of a customer identified as sender, but is effective as an order of the customer pursuant to section 490:4A-202(b), the follo…

§490:4A-204 Refund of payment and duty of customer to report with respect to unauthorized payment order. (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 s…

§490:4A-205 Erroneous payment orders. (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 pay…

§490:4A-206 Transmission of payment order through funds-transfer or other communication system. (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 deem…

§490:4A-207 Misdescription of beneficiary. (a) Subject to subsection (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 ha…

§490:4A-208 Misdescription of intermediary bank or beneficiary's bank. (a) This subsection applies to a payment order identifying an intermediary bank or the beneficiary's bank only by an identifying number. (b) This subsection applies to a payment order identifying an intermedia…

§490:4A-209 Acceptance of payment order. (a) Subject to subsection (d), a receiving bank other than the beneficiary's bank accepts a payment order when it executes the order. (b) Subject to subsections (c) and (d), a beneficiary's bank accepts a payment order at the earliest of t…

§490:4A-210 Rejection of payment order. (a) A payment order shall be deemed rejected by the receiving bank by a notice of rejection transmitted to the sender orally or in a record. A notice of rejection need not use any particular words and shall be sufficient if it indicates tha…

§490:4A-211 Cancellation and amendment of payment order. (a) A communication of the sender of a payment order canceling or amending the order may be transmitted to the receiving bank orally or in a record. If a security procedure is in effect between the sender and the receiving …

§490:4A-212 Liability and duty of receiving bank regarding unaccepted payment order. 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…

PART 3. EXECUTION OF SENDER'S PAYMENT ORDER BY RECEIVING BANK §490:4A-301 Execution and execution date. (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…

§490:4A-302 Obligations of receiving bank in execution of payment order. (a) Except as provided in subsections (b) through (d), if the receiving bank accepts a payment order pursuant to section 490:4A-209(a), the bank has the following obligations in executing the order: (b) Unle…

§490:4A-303 Erroneous execution of payment order. (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 th…

§490:4A-304 Duty of sender to report erroneously executed payment order. If the sender of a payment order that is erroneously executed as stated in section 490:4A-303 receives notification from the receiving bank that the order was executed or that the sender's account was debite…

§490:4A-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 490:4A-302 results in delay in payment to the beneficiary, the bank is oblig…

PART 4. PAYMENT §490:4A-401 Payment date. "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 t…

§490:4A-402 Obligation of sender to pay receiving bank. (a) This section is subject to sections 490:4A-205 and 490:4A-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 th…

§490:4A-403 Payment by sender to receiving bank. (a) Payment of the sender's obligation under section 490:4A-402 to pay the receiving bank occurs as follows: (b) If the sender and receiving bank are members of a funds-transfer system that nets obligations multilaterally among par…

§490:4A-404 Obligation of beneficiary's bank to pay and give notice to beneficiary. (a) Subject to sections 490:4A-211(e), 490:4A-405(d), and 490:4A-405(e), if a beneficiary's bank accepts a payment order, the bank is obliged to pay the amount of the order to the beneficiary of t…

§490:4A-405 Payment by beneficiary's bank to beneficiary. (a) If the beneficiary's bank credits an account of the beneficiary of a payment order, payment of the bank's obligation under section 490:4A-404(a) occurs when and to the extent (i) the beneficiary is notified of the righ…

§490:4A-406 Payment by originator to beneficiary; discharge of underlying obligation. (a) Subject to sections 490:4A-211(e), 490:4A-405(d), and 490:4A-405(e), the originator of a funds transfer pays the beneficiary of the originator's payment order (i) at the time a payment order…

PART 5. MISCELLANEOUS PROVISIONS §490:4A-501 Variation by agreement and effect of funds-transfer system rule. (a) Except as otherwise provided in this article, rights and obligations of a party to a funds transfer may be varied by agreement of the affected party. (b) "Funds-trans…

§490:4A-502 Creditor process served on receiving bank; setoff by beneficiary's bank. (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 …

§490:4A-503 Injunction or restraining order with respect to funds transfer. 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 or…

§490:4A-504 Order in which items and payment orders may be charged to account; order of withdrawals from account. (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 accoun…

§490:4A-505 Preclusion of objection to debit of customer's account. 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 …

§490:4A-506 Rate of interest. (a) If, under this article, 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 rul…

§490:4A-507 Choice of law. (a) The following rules apply unless the affected parties otherwise agree or subsection (c) applies: (b) If the parties described in each paragraph of subsection (a) have made an agreement selecting the law of a particular jurisdiction to govern rights …

ARTICLE 5. [OLD] LETTERS OF CREDIT §§490:5-101 to 490:5-117 REPEALED. L 1996, c 39, §10. ARTICLE 5. LETTERS OF CREDIT §490:5-101 Short title. This article may be cited as Uniform Commercial Code--Letters of Credit. [L 1996, c 39, pt of §1]