Title BC, Business and Commerce Code

Sec. 4A.105. OTHER DEFINITIONS. (a) In this chapter: (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, an…

Sec. 4A.106. TIME PAYMENT ORDER IS RECEIVED. (a) The time of receipt of a payment order or communication cancelling or amending a payment order is determined by the rules applicable to receipt of a notice stated in Section 1.202. A receiving bank may fix a cutoff time or times on…

Sec. 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 chapter to the extent of the inconsistency. Adde…

Sec. 4A.108. RELATIONSHIP TO ELECTRONIC FUND TRANSFER ACT. (a) Except as provided in Subsection (b), this chapter does not apply to a funds transfer any part of which is governed by the Electronic Fund Transfer Act, 15 U.S.C. Sec. 1693 et seq., as amended from time to time. (b) T…

Sec. 4A.201. SECURITY PROCEDURE. "Security procedure" means a procedure established by an agreement between a customer and a receiving bank for the purpose of (i) verifying that a payment order or communication amending or cancelling a payment order is that of the customer, or (i…

Sec. 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 custom…

Sec. 4A.203. UNENFORCEABILITY OF CERTAIN VERIFIED PAYMENT ORDERS. (a) If an accepted payment order is not, under Section 4A.202(a), an authorized order of a customer identified as sender, but is effective as an order of the customer pursuant to Section 4A.202(b), the following ru…

Sec. 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 …

Sec. 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 pa…

Sec. 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 dee…

Sec. 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 h…

Sec. 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. (1) The receiving bank may rely on the number as the proper identificat…

Sec. 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 …

Sec. 4A.210. REJECTION OF PAYMENT ORDER. (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 …

Sec. 4A.211. CANCELLATION AND AMENDMENT OF PAYMENT ORDER. (a) A communication of the sender of a payment order cancelling 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 …

Sec. 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 i…

Sec. 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 the beneficiary's bank can be accepted but cannot be execute…

Sec. 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 4A.209(a), the bank has the following obligations in executing the order: (1) The rec…

Sec. 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…

Sec. 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 4A.303 receives notification from the receiving bank that the order was executed or that the sender's account was debited w…

Sec. 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 b…

Sec. 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 the order is rec…

Sec. 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…

Sec. 4A.403. PAYMENT BY SENDER TO RECEIVING BANK. (a) Payment of the sender's obligation under Section 4A.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 Fed…

Sec. 4A.404. OBLIGATION OF BENEFICIARY'S BANK TO PAY AND GIVE NOTICE TO BENEFICIARY. (a) Subject to Sections 4A.211(e) and 4A.405(d) and (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. Payme…

Sec. 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 4A.404(a) occurs when and to the extent: (1) the beneficiary is notified of the right …

Sec. 4A.406. PAYMENT BY ORIGINATOR TO BENEFICIARY; DISCHARGE OF UNDERLYING OBLIGATION. (a) Subject to Sections 4A.211(e) and 4A.405(d) and (e), the originator of a funds transfer pays the beneficiary of the originator's payment order: (1) at the time a payment order for the benef…

Sec. 4A.501. VARIATION BY AGREEMENT AND EFFECT OF FUNDS TRANSFER SYSTEM RULE. (a) Except as otherwise provided in this chapter, 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 rul…

Sec. 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…

Sec. 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 o…

Sec. 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 accou…

Sec. 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…

Sec. 4A.506. RATE OF INTEREST. (a) If, under this chapter, 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 funds transfer system rule…

Sec. 4A.507. CHOICE OF LAW. (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 re…