47-4A405

47-4A405. 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 47-4A404, subsection A occurs when
and to the extent:

1. The beneficiary is notified of the right to withdraw the credit;

2. The bank lawfully applies the credit to a debt of the beneficiary; or

3. Funds with respect to the order are otherwise made available to the beneficiary
by the bank.

B. 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 section 47-4A404,
subsection A occurs is governed by principles of law that determine when an obligation is
satisfied.

C. Except as stated in subsections D and E 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.

D. 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 section 47-4A406.

E. 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:

1. The acceptance by the beneficiary's bank is nullified and no person has any
right or obligation based on the acceptance;

2. The beneficiary's bank is entitled to recover payment from the beneficiary;

3. No payment by the originator to the beneficiary occurs under section 47-4A406;
and

4. Subject to section 47-4A402, subsection E, each sender in the funds transfer is
excused from its obligation to pay its payment order under section 47-4A402, subsection C
because the funds transfer has not been completed.