47-4A211

47-4A211. 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 and the receiving bank, the
communication is not effective to cancel or amend the order unless the communication is
verified pursuant to the security procedure or the bank agrees to the cancellation or
amendment.

B. Subject to subsection A, a communication by the sender cancelling or amending a
payment order is effective to cancel or amend the order if notice of the communication is
received at a time and in a manner affording the receiving bank a reasonable opportunity
to act on the communication before the bank accepts the payment order.

C. After a payment order has been accepted, cancellation or amendment of the order
is not effective unless the receiving bank agrees or a funds-transfer system rule allows
cancellation or amendment without agreement of the bank and:

1. With respect to a payment order accepted by a receiving bank other than the
beneficiary's bank, cancellation or amendment is not effective unless a conforming
cancellation or amendment of the payment order issued by the receiving bank is also made.

2. With respect to a payment order accepted by the beneficiary's bank, cancellation
or amendment is not effective unless the order was issued in execution of an unauthorized
payment order, or because of a mistake by a sender in the funds transfer which resulted
in the issuance of a payment order 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.

D. An unaccepted payment order is canceled by operation of law at the close of the
fifth funds-transfer business day of the receiving bank after the execution date or
payment date of the order.

E. A canceled payment order cannot be accepted. If an accepted payment order is
canceled, the acceptance is nullified and no person has any right or obligation based on
the acceptance. Amendment of a payment order is deemed to be cancellation of the
original order at the time of amendment and issue of a new payment order in the amended
form at the same time.

F. Unless otherwise provided in an agreement of the parties or in a funds-transfer
system rule, if the receiving bank, after accepting a payment order, agrees to
cancellation or amendment of the order by the sender or is bound by a funds-transfer
system rule allowing cancellation or amendment without the bank's agreement, the sender,
whether or not cancellation or amendment is effective, is liable to the bank for any loss
and expenses, including reasonable attorney fees, incurred by the bank as a result of the
cancellation or amendment or attempted cancellation or amendment.

G. A payment order is not revoked by the death or legal incapacity of the sender
unless the receiving bank knows of the death or of an adjudication of incapacity by a
court of competent jurisdiction and has reasonable opportunity to act before acceptance
of the order.

H. A funds-transfer system rule is not effective to the extent it conflicts with
subsection C, paragraph 2.