Title 26, COMMERCIAL LAW

Sec. 104. In IC 26-1-4.1: (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 interm…

Sec. 105. (a) In IC 26-1-4.1: (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 custom…

Sec. 106. (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 IC 26-1-1-201(27). A receiving bank may fix a cut-off time or times on a funds-transfer business day …

Sec. 107. Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the Federal Reserve Banks supersede any inconsistent provision of IC 26-1-4.1 to the extent of the inconsistency. As added by P.L.189-1991, SEC.4.

Sec. 108. (a) Except as provided by subsection (b), IC 26-1-4.1 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. 1693 et seq. As amended from time to time. (b) IC 26…

Sec. 201. "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 transm…

Sec. 202. (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 pay…

Sec. 203. (a) If an accepted payment order is not, under IC 26-1-4.1-202(a), an authorized order of a customer identified as sender, but is effective as an order of the customer pursuant to IC 26-1-4.1-202(b), the following rules apply: (1) By express agreement, evidenced by a re…

Sec. 204. (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 IC 26-1-2.1-202, or (ii) not enforceable, in whole or in part, against the customer under IC 26-…

Sec. 205. (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 th…

Sec. 206. (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 t…

Sec. 207. (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 has rights as a beneficiary of the …

Sec. 208. (a) This subsection 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 det…

Sec. 209. (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 the following times: (1) when th…

Sec. 210. (a) A payment order is 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 is sufficient if it indicates that the receiving bank is rejecting the order or wi…

Sec. 211. (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 bank, the communication is not effective to can…

Sec. 212. 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 IC 26-1-4.1, but does not otherwise have any duty to accept a payment orde…

Sec. 301. (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 paym…

Sec. 302. (a) Except as provided in subsections (b) through (d), if the receiving bank accepts a payment order pursuant to IC 26-1-4.1-209(a), the bank has the following obligations in executing the order: (1) The receiving bank is obliged to issue, on the execution date, a payme…

Sec. 303. (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…

Sec. 304. If the sender of a payment order that is erroneously executed as stated in IC 26-1-4.1-303 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 ord…

Sec. 305. (a) If a funds transfer is completed but execution of a payment order by the receiving bank in breach of IC 26-1-4.1-302 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…

Sec. 401. "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 bene…

Sec. 402. (a) This section is subject to IC 26-1-4.1-205 and IC 26-1-4.1-207. (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 pay…

Sec. 403. (a) Payment of the sender's obligation under IC 26-1-4.1-402 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-tr…

Sec. 404. (a) Subject to IC 26-1-4.1-211(e), IC 26-1-4.1-405(d), and IC 26-1-4.1-405(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 the order. Payment is due on the payment date of the order, but if ac…

Sec. 405. (a) If the beneficiary's bank credits an account of the beneficiary of a payment order, payment of the bank's obligation under IC 26-1-4.1-404(a) occurs when and to the extent (i) the beneficiary is notified of the right to withdraw the credit, (ii) the bank lawfully ap…

Sec. 406. (a) Subject to IC 26-1-4.1-211(e), IC 26-1-4.1-405(d), and IC 26-1-4.1-405(e), 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 b…

Sec. 501. (a) Except as otherwise provided in IC 26-1-4.1, 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 or…

Sec. 502. (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 subsection applies to creditor process with…

Sec. 503. 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 releas…

Sec. 504. (a) If a receiving bank has received more than one (1) payment order of the sender or one (1) 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 …

Sec. 505. 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 asse…

Sec. 506. (a) If, under IC 26-1-4.1, 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 orde…

Sec. 507. (a) The following rules apply unless the affected parties otherwise agree or subsection (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 lo…

Sec. 101. (a) IC 26-1-5.1 shall be known and may be cited as Uniform Commercial Code ) Letters of Credit. (b) IC 26-1-5.1 applies to a letter of credit that is issued after June 30, 1996, and does not apply to a transaction, event, obligation, or duty arising out of or associated…

Sec. 102. (a) In IC 26-1-5.1: (1) "Adviser" means a person who, at the request of the issuer, a confirmer, or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of credit has been issued, confirmed, or amended. (2) "Applicant" means a pe…

Sec. 103. (a) IC 26-1-8.1 applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit. (b) The statement of a rule in IC 26-1-5.1 does not by itself require, imply, or negate application of the same or a different rul…

Sec. 104. A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued in any form that is a signed record. As added by P.L.183-1996, SEC.4. Amended by P.L.199-2023, SEC.31.

Sec. 105. Consideration is not required to issue, amend, transfer, or cancel a letter of credit, advice, or confirmation. As added by P.L.183-1996, SEC.4.

Sec. 106. (a) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it to the person requested to advise or to the beneficiary. A letter of credit is revocable only if it so provides. (b) After …

Sec. 107. (a) A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its confirmation. The confirmer also has rights against and obligations to the issuer as if the issuer were an applicant and the confirmer had is…

Sec. 108. (a) Except as otherwise provided in IC 26-1-5.1-109, an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection (e), appears on its face strictly to comply with the terms and conditions of the letter of credit. Except as …

Sec. 109. (a) If a presentation is made that appears on its face strictly to comply with the terms and conditions of the letter of credit, but a required document is forged or materially fraudulent, or honor of the presentation would facilitate a material fraud by the beneficiary…

Sec. 110. (a) If its presentation is honored, the beneficiary warrants: (1) to the issuer, any other person to whom presentation is made, and the applicant that there is no fraud or forgery of the kind described in IC 26-1-5.1-109(a); and (2) to the applicant that the drawing doe…

Sec. 111. (a) If an issuer wrongfully dishonors or repudiates its obligation to pay money under a letter of credit before presentation, the beneficiary, successor, or nominated person presenting on its own behalf may recover from the issuer the amount that is the subject of the d…