 |
 |
|
|
|
|
| search a lawyer |
|
|
| ACTS, STATUTES |
|
|
|
|
|
|
|
|
|
|
|
|
| Home > Statutes > Usa Oregon |
|
USA Statutes : oregon
Title : TITLE 08 COMMERCIAL TRANSACTIONS
Chapter : Chapter 74A Funds Transfers
|
|
This chapter may be cited as Uniform
Commercial Code–Funds Transfers. [1991 c.442 §1] Except as otherwise provided in ORS
74A.1080, this chapter applies to funds transfers defined in ORS
74A.1040. [1991 c.442 §2] (1) As used in this chapter:
(a) “Beneficiary” means the person to be paid by the beneficiary’s
bank.
(b) “Beneficiary’s bank” means the bank identified in a payment
order in which an account for 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.
(c) “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:
(A) The instruction does not state a condition for payment to the
beneficiary other than time of payment;
(B) The receiving bank is to be reimbursed by debiting an account
of, or otherwise receiving payment from, the sender; and
(C) 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.
(d) “Receiving bank” means the bank to which the sender’s
instruction is addressed.
(e) “Sender” means the person giving the instruction to the
receiving bank.
(2) If an instruction complying with subsection (1)(c) of this
section is to make more than one payment to a beneficiary, the
instruction is a separate payment order with respect to each payment.
(3) A payment order is issued when it is sent to the receiving
bank. [1991 c.442 §3] As used in this chapter:
(1) “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.
(2) “Intermediary bank” means a receiving bank other than the
originator’s bank or the beneficiary’s bank.
(3) “Originator” means the sender of the first payment order in a
funds transfer.
(4) “Originator’s bank” means:
(a) The receiving bank to which the payment order of the originator
is issued if the originator is not a bank; or
(b) The originator if the originator is a bank. [1991 c.442 §4] (1) As used in this chapter:
(a) “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.
(b) “Bank” means a financial institution, as defined in ORS
706.008. A branch or separate office of a bank is a separate bank for
purposes of this chapter.
(c) “Customer” means a person, including a bank, having an account
with a bank or from whom a bank has agreed to receive payment orders.
(d) “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.
(e) “Funds-transfer system” means a wire transfer network,
automated clearing house, or other communication system of a clearing
house 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.
(f) “Good faith” means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(g) “Prove” with respect to a fact means to meet the burden of
establishing the fact.
(2) Other definitions applying to this chapter and the sections in
which they appear are:
“Acceptance” ORS 74A.2090
“Beneficiary” ORS 74A.1030
“Beneficiary’s bank” ORS 74A.1030
“Executed” ORS 74A.3010
“Execution date” ORS 74A.3010
“Funds transfer” ORS 74A.1040
“Funds-transfer system rule” ORS 74A.5010
“Intermediary bank” ORS 74A.1040
“Originator” ORS 74A.1040
“Originator’s bank” ORS 74A.1040
“Payment by beneficiary’s
bank to beneficiary” ORS 74A.4050
“Payment by originator to
beneficiary” ORS 74A.4060
“Payment by sender
to receiving bank” ORS 74A.4030
“Payment date” ORS 74A.4010
“Payment order” ORS 74A.1030
“Receiving bank” ORS 74A.1030
“Security procedure” ORS 74A.2010
“Sender” ORS 74A.1030
(3) The following definitions in ORS chapter 74 apply to this
chapter and ORS 71.1010:
“Clearing house” ORS 74.1040
“Item” ORS 74.1040
“Suspends payments” ORS 74.1040
(4) In addition ORS chapter 71 contains general definitions and
principles of construction and interpretation applicable throughout this
chapter. [1991 c.442 §5; 1997 c.631 §381] (1) 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 ORS
71.2010 (27). A receiving bank may fix a cut-off 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
cut-off times may apply to payment orders, cancellations or amendments,
or to different categories of payment orders, cancellations or
amendments. A cut-off time may apply to senders generally or different
cut-off 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 cut-off 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.
(2) If this chapter refers to an execution date or payment date or
state 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 chapter. [1991 c.442 §6]
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. [1991 c.442 §7]
This chapter does not apply to a funds transfer any part of which is
governed by the Electronic Fund Transfer Act of 1978 (Title XX, P.L.
95.630, 92 Stat. 3728, 15 U.S.C. §1693 et seq.). [1991 c.442 §8]ISSUE AND ACCEPTANCE OF PAYMENT ORDER (1) “Security procedure” means a
procedure established by agreement of a customer and a receiving bank for
the purpose of:
(a) Verifying that a payment order or communication amending or
canceling a payment order is that of the customer; or
(b) Detecting error in the transmission or the content of the
payment order or communication.
(2) A security procedure may require the use of algorithms or other
codes, identifying words or numbers, encryption, call-back 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. [1991 c.442 §9] (1) 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.
(2) 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:
(a) The security procedure is a commercially reasonable method of
providing security against unauthorized payment orders; and
(b) 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.
(3) 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.
(4) 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:
(a) 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
(b) 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.
(5) The term “sender” in this chapter includes the customer in
whose name a payment order is issued if the order is the authorized order
of the customer under subsection (1) of this section, or it is effective
as the order of the customer under subsection (2) of this section.
(6) This section applies to amendments and cancellations of payment
orders to the same extent it applies to payment orders.
(7) Except as provided in this section and ORS 74A.2030, rights and
obligations arising under this section or ORS 74A.2030 may not be varied
by agreement. [1991 c.442 §10] (1)
If an accepted payment order is not, under ORS 74A.2020, an authorized
order of a customer identified as sender, but is effective as an order of
the customer pursuant to ORS 74A.2020, the following rules apply:
(a) 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.
(b) 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:
(A) Entrusted at any time with duties to act for the customer with
respect to payment orders or the security procedure; or
(B) 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.
(2) “Information” includes any access device, computer software or
the like.
(3) This section applies to amendments of payment orders to the
same extent it applies to payment orders. [1991 c.442 §11](1) If a receiving bank accepts a
payment order issued in the name of its customer as sender which is not
authorized and not effective as the order of the customer under ORS
74A.2020 or not enforceable, in whole or in part, against the customer
under ORS 74A.2030, 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.
(2) Reasonable time under subsection (1) of this section may be
fixed by agreement as stated in ORS 71.2040, but the obligation of a
receiving bank to refund payment as stated in subsection (1) of this
section may not otherwise be varied by agreement. [1991 c.442 §12] (1) The rules stated in
subsection (2) of this section apply if an accepted payment order was
transmitted pursuant to a security procedure for the detection of error
and the payment order:
(a) Erroneously instructed payment to a beneficiary not intended by
the sender;
(b) Erroneously instructed payment in an amount greater than the
amount intended by the sender; or
(c) Was an erroneously transmitted duplicate of a payment order
previously sent by the sender.
(2)(a) If the sender proves that the sender or a person acting on
behalf of the sender pursuant to ORS 74A.2060 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 (b) and (c) of this subsection.
(b) If the funds transfer is completed on the basis of an erroneous
payment order described in subsection (1)(a) or (c) of this section, 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.
(c) If the funds transfer is completed on the basis of a payment
order described in subsection (1)(b) of this section, 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.
(3) If the sender of an erroneous payment order described in
subsection (1) of this section is not obliged to pay all or part of the
order, and 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.
(4) This section applies to amendments to payment orders to the
same extent it applies to payment orders. [1991 c.442 §13](1) 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.
(2) This section applies to cancellations and amendments of payment
orders to the same extent it applies to payment orders. [1991 c.442 §14] (1) Subject to subsection
(2) of this section, 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.
(2) 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:
(a) Except as otherwise provided in subsection (3) of this section,
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.
(b) 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.
(3) If a payment order described in subsection (2) of this section
is accepted, the originator’s payment order described the beneficiary
inconsistently by name and number and the beneficiary’s bank pays the
person identified by number as permitted by subsection (2)(a) of this
section, the following rules apply:
(a) If the originator is a bank, the originator is obliged to pay
its order; and
(b) 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.
(4) In a case governed by subsection (2)(a) of this section, 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:
(a) If the originator is obliged to pay its payment order as stated
in subsection (3) of this section, the originator has the right to
recover.
(b) 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. [1991
c.442 §15]
(1) This subsection applies to a payment order identifying an
intermediary bank or the beneficiary’s bank only by an identifying number.
(a) 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.
(b) 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) This subsection 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.
(a) 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.
(b) 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 (a) of this
subsection, 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.
(c) 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.
(d) 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 ORS
74A.3020 (1)(a). [1991 c.442 §16] (1) Subject to subsection (4)
of this section, a receiving bank other than the beneficiary’s bank
accepts a payment order when it executes the order.
(2) Subject to subsections (3) and (4) of this section, a
beneficiary’s bank accepts a payment order at the earliest of the
following times:
(a) When the bank:
(A) Pays the beneficiary as stated in ORS 74A.4050 (1)(a) or (2); or
(B) 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;
(b) When the bank receives payment of the entire amount of the
sender’s order pursuant to ORS 74A.4030 (1)(a) or (b); or
(c) 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 one hour after that time, or 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.
(3) Acceptance of a payment order cannot occur before the order is
received by the receiving bank. Acceptance does not occur under
subsection (2)(b) or (c) of this section 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.
(4) 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 ORS 74A.2110 (2), the bank may recover from the beneficiary
any payment received to the extent allowed by the law governing mistake
and restitution. [1991 c.442 §17] (1) 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:
(a) Any means complying with the agreement is reasonable; and
(b) Any means not complying is not reasonable unless no significant
delay in receipt of the notice resulted from the use of the noncomplying
means.
(2) This subsection 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 ORS 74A.2110 (4) 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.
(3) If a receiving bank suspends payments, all unaccepted payment
orders issued to it are deemed rejected at the time the bank suspends
payments.
(4) Acceptance of a payment order precludes a later rejection of
the order. Rejection of a payment order precludes a later acceptance of
the order. [1991 c.442 §18] (1) 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.
(2) Subject to subsection (1) of this section, 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.
(3) 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. The following apply:
(a) 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.
(b) 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 that is a duplicate of a payment order previously
issued by the sender, that orders payment to a beneficiary not entitled
to receive payment from the originator or 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.
(4) 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.
(5) 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.
(6) 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 fees, incurred by the
bank as a result of the cancellation or amendment or attempted
cancellation or amendment.
(7) 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.
(8) A funds-transfer system rule is not effective to the extent it
conflicts with subsection (3)(b) of this section. [1991 c.442 §19]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 chapter, 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 chapter or
by express agreement. Liability based on acceptance arises only when
acceptance occurs as stated in ORS 74A.2090 and liability is limited to
that provided in this chapter. 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 chapter or by express
agreement. [1991 c.442 §20]EXECUTION OF SENDER’S PAYMENT ORDER BY RECEIVING BANK (1) 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.
(2) “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. [1991
c.442 §21](1) Except as provided in subsections (2) to (4) of this section,
if the receiving bank accepts a payment order pursuant to ORS 74A.2090
(1), the bank has the following obligations in executing the order:
(a) 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 any intermediary bank or funds-transfer
system to be used in carrying out the funds transfer, or 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.
(b) 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.
(2) Unless otherwise instructed, a receiving bank executing a
payment order may use any funds-transfer system if use of that system is
reasonable in the circumstances, and 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.
(3) Unless subsection (1)(b) of this section 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.
(4) Unless instructed by the sender:
(a) 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
(b) May not instruct a subsequent receiving bank to obtain payment
of its charges in the same manner. [1991 c.442 §22] (1) A receiving bank
that 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 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 ORS 74A.4020 (3) if that subsection 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.
(2) 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 ORS 74A.4020 (3) if that subsection is otherwise satisfied and 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 subsection 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.
(3) 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 covering mistake and restitution. [1991 c.442
§23]If the sender of a payment order that is erroneously executed as
stated in ORS 74A.3030 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, that bank is not obliged to pay interest on
any amount refundable to the sender under ORS 74A.4020 (4) 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. [1991 c.442 §24](1) If a funds transfer is completed but execution
of a payment order by the receiving bank in breach of ORS 74A.3020
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 subsection (3) of this section, additional damages are not
recoverable.
(2) If execution of a payment order by a receiving bank in breach
of ORS 74A.3020 results in noncompletion of the funds transfer, failure
to use an intermediary bank designated by the originator or 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 the expenses of
the originator in the funds transfer and for incidental expenses and
interest losses, to the extent not covered by subsection (1) of this
section, resulting from the improper execution. Except as provided in
subsection (3) of this section, additional damages are not recoverable.
(3) In addition to the amounts payable under subsections (1) and
(2) of this section, damages, including consequential damages, are
recoverable to the extent provided in an express written agreement of the
receiving bank.
(4) 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 the expenses of the sender 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.
(5) The court may award reasonable attorney fees to the prevailing
party in an action to recover amounts under this section.
(6) Except as stated in this section, the liability of a receiving
bank under subsections (1) and (2) of this section may not be varied by
agreement. [1991 c.442 §25; 1995 c.618 §44]PAYMENT “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. [1991 c.442 §26] (1) This
section is subject to ORS 74A.2050 and 74A.2070.
(2) 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.
(3) This subsection is subject to subsection (5) of this section
and to ORS 74A.3030. 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.
(4) 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 ORS 74A.2040 and 74A.3040, interest is payable
on the refundable amount from the date of payment.
(5) If a funds transfer is not completed as stated in subsection
(3) of this section and an intermediary bank is obliged to refund payment
as stated in subsection (4) of this section but is unable to do so
because not permitted by applicable law or because the bank suspends
payments, a sender in the funds transfer that executed a payment order in
compliance with an instruction, as stated in ORS 74A.3020 (1)(a), 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 subsection (4) of this section.
(6) The right of the sender of a payment order to be excused from
the obligation to pay the order as stated in subsection (3) of this
section or to receive refund under subsection (4) of this section may not
be varied by agreement. [1991 c.442 §27] (1) Payment of the
sender’s obligation under ORS 74A.4020 to pay the receiving bank occurs
as follows:
(a) 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.
(b) If the sender is a bank and the sender credited an account of
the receiving bank with the sender, or 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.
(c) 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.
(2)(a) 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.
(b) 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.
(c) 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.
(d) The aggregate balance is determined after the right of setoff
described in paragraph (b) of this subsection has been exercised.
(3) If two banks transmit payment orders to each other under an
agreement that settlement of the obligations of each bank to the other
under ORS 74A.4020 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.
(4) In a case not covered by subsection (1) of this section, the
time when payment of the sender’s obligation under ORS 74A.4020 (2) or
(3) occurs is governed by the applicable principles of law that determine
when an obligation is satisfied. [1991 c.442 §28](1) Subject to ORS 74A.2110 (5) and 74A.4050 (4) and (5), 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.
(2) 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. The court may award
reasonable attorney fees to the prevailing party in an action to recover
interest owing by reason of the provisions of this subsection.
(3) The right of a beneficiary to receive payment and damages as
stated in subsection (1) of this section may not be varied by agreement
or a funds-transfer system rule. The right of a beneficiary to be
notified as stated in subsection (2) of this section 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. [1991 c.442 §29; 1995 c.618 §45] (1) If the
beneficiary’s bank credits an account of the beneficiary of a payment
order, payment of the bank’s obligation under ORS 74A.4040 (1) occurs
when and to the extent:
(a) The beneficiary is notified of the right to withdraw the credit;
(b) The bank lawfully applies the credit to a debt of the
beneficiary; or
(c) Funds with respect to the order are otherwise made available to
the beneficiary by the bank.
(2) 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 ORS 74A.4040 (1) occurs is governed by principles of law
that determine when an obligation is satisfied.
(3) Except as stated in subsections (4) and (5) of this section, 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.
(4) 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
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, the beneficiary, the beneficiary’s bank and the
originator’s bank agreed to be bound by the rule, and 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 ORS 74A.4060.
(5) This subsection applies to a funds transfer that includes a
payment order transmitted over a funds-transfer system that nets
obligations multilaterally among participants, and 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:
(a) The acceptance by the beneficiary’s bank is nullified and no
person has any right or obligation based on the acceptance;
(b) The beneficiary’s bank is entitled to recover payment from the
beneficiary;
(c) No payment by the originator to the beneficiary occurs under
ORS 74A.4060; and
(d) Subject to ORS 74A.4020 (5), each sender in the funds transfer
is excused from its obligation to pay its payment order under ORS
74A.4020 (3) because the funds transfer has not been completed. [1991
c.442 §30](1) Subject to ORS 74A.2110 (5) and 74A.4050 (4)
and (5), the originator of a funds transfer pays the beneficiary of the
originator’s payment order:
(a) At the time a payment order for the benefit of the beneficiary
is accepted by the beneficiary’s bank in the funds transfer; and
(b) 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.
(2) If payment under subsection (1) of this section 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:
(a) The payment under subsection (1) of this section was made by a
means prohibited by the contract of the beneficiary with respect to the
obligation;
(b) 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;
(c) Funds with respect to the order were not withdrawn by the
beneficiary or applied to a debt of the beneficiary; and
(d) The beneficiary would suffer a loss that could reasonably have
been avoided if payment had been made by a means complying with the
contract.
(3) 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 ORS
74A.4040 (1).
(4) For the purpose of determining whether discharge of an
obligation occurs under subsection (2) of this section, 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.
(5) 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. [1991 c.442 §31]MISCELLANEOUS PROVISIONS(1) 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.
(2) “Funds-transfer system rule” means a rule of an association of
banks:
(a) 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
(b) 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.
(3) Except as otherwise provided in this chapter, 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
chapter 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 ORS 74A.4040 (3), 74A.4050 (4)
and 74A.5070 (3). [1991 c.442 §32](1) 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.
(2) This subsection 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.
(3) If a beneficiary’s bank has received a payment order for
payment to the beneficiary’s account in the bank, the following rules
apply:
(a) 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;
(b) 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; and
(c) 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.
(4) 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. [1991 c.442 §33](1) For proper cause and in compliance with applicable law, a
court may restrain:
(a) A person from issuing a payment order to initiate a funds
transfer;
(b) An originator’s bank from executing the payment order of the
originator; or
(c) The beneficiary’s bank from releasing funds to the beneficiary
or the beneficiary from withdrawing the funds.
(2) 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. [1991 c.442 §34](1) 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.
(2) 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. [1991 c.442 §35] 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. [1991 c.442 §36] (1) 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:
(a) By agreement of the sender and receiving bank; or
(b) By a funds-transfer system rule if the payment order is
transmitted through a funds-transfer system.
(2) If the amount of interest is not determined by an agreement or
rule as stated in subsection (1) of this section, 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. [1991 c.442 §37] (1) The following rules apply unless the
affected parties otherwise agree or subsection (3) of this section
applies:
(a) 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.
(b) 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.
(c) 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.
(2) If the parties described in each paragraph of subsection (1) of
this section 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.
(3) A funds-transfer system rule may select the law of a particular
jurisdiction to govern:
(a) Rights and obligations between participating banks with respect
to payment orders transmitted or processed through the system; or
(b) 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.
(4) A choice of law made pursuant to subsection (3)(a) of this
section is binding on participating banks. A choice of law made pursuant
to subsection (3)(b) of this section 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 subsection may govern whether or
not that law bears a reasonable relation to the matter in issue.
(5) In the event of inconsistency between an agreement under
subsection (2) of this section and a choice-of-law rule under subsection
(3) of this section, the agreement under subsection (2) of this section
prevails.
(6) 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. [1991 c.442 §38]
_______________
|
|
|
|
