PART 2

TITLE 6

Commerce and Trade

SUBTITLE I

Uniform Commercial Code

ARTICLE 4A. FUNDS TRANSFERS

PART 2 Issue and Acceptance of Payment Order

§ 4A-201. Security procedure.

"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 cancelling a payment order is that of the customer, or (ii) detecting
error in the transmission or the content of the payment order or communication. A security procedure may require the use of
algorithms or other codes, identifying words or numbers, encryption, callback 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.

68 Del. Laws, c. 430, § 1.;

§ 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 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 (i) the security procedure is a commercially reasonable method of
providing security against unauthorized payment orders, and (ii) 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. 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.

(c) 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 (i) 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 (ii) 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.

(d) The term "sender" in this Article includes the customer in whose name a payment order is issued if the order is the authorized
order of the customer under subsection (a), or it is effective as the order of the customer under subsection (b).

(e) This section applies to amendments and cancellations of payment orders to the same extent it applies to payment orders.

(f) Except as provided in this section and in Section 4A-203(a)(1), rights and obligations arising under this section or Section
4A-203 may not be varied by agreement.

68 Del. Laws, c. 430, § 1.;

§ 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 rules apply:

(1) 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.

(2) 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 (i) entrusted at any time with duties to act for the customer with respect
to payment orders or the security procedure, or (ii) 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. Information
includes any access device, computer software, or the like.

(b) This section applies to amendments of payment orders to the same extent it applies to payment orders.

68 Del. Laws, c. 430, § 1.;

§ 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 Section 4A-202, or (ii) not enforceable, in whole or in part, against the
customer under Section 4A-203, 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.

(b) Reasonable time under subsection (a) may be fixed by agreement as stated in Section 1-302(b), but the obligation of a
receiving bank to refund payment as stated in subsection (a) may not otherwise be varied by agreement.

68 Del. Laws, c. 430, § 1; 74 Del. Laws, c. 332, § 37.;

§ 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 payment
in an amount greater than the amount intended by the sender, or (iii) was an erroneously transmitted duplicate of a payment
order previously sent by the sender, the following rules apply:

(1) If the sender proves that the sender or a person acting on behalf of the sender pursuant to Section 4A-206 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 (2) and (3).

(2) If the funds transfer is completed on the basis of an erroneous payment order described in clause (i) or (iii) of subsection
(a), 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.

(3) If the funds transfer is completed on the basis of a payment order described in clause (ii) of subsection (a), 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.

(b) If (i) the sender of an erroneous payment order described in subsection (a) is not obliged to pay all or part of the order,
and (ii) 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.

68 Del. Laws, c. 430, § 1.;

§ 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 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.

(b) This section applies to cancellations and amendments of payment orders to the same extent it applies to payment orders.

68 Del. Laws, c. 430, § 1.;

§ 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 has rights
as a beneficiary of the order and acceptance of the order cannot occur.

(b) 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:

(1) Except as otherwise provided in subsection (c), 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.

(2) 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.

(c) If (i) a payment order described in subsection (b) is accepted, (ii) the originator's payment order described the beneficiary
inconsistently by name and number, and (iii) the beneficiary's bank pays the person identified by number as permitted by subsection
(b)(1), the following rules apply:

(1) If the originator is a bank, the originator is obliged to pay its order.

(2) 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.

(d) In a case governed by subsection (b)(1), 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:

(1) If the originator is obliged to pay its payment order as stated in subsection (c), the originator has the right to recover.

(2) 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.

68 Del. Laws, c. 430, § 1.;

§ 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 identification of the intermediary or beneficiary's bank and need
not determine whether the number identifies a bank.

(2) 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) 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.

(1) 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.

(2) 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 subsection (b)(1), 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.

(3) 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.

(4) 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 Section 4A-302(a)(1).

68 Del. Laws, c. 430, § 1.;

§ 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 the following times:

(1) when the bank (i) pays the beneficiary as stated in Section 4A-405(a) or 4A-405(b), or (ii) 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;

(2) when the bank receives payment of the entire amount of the sender's order pursuant to Section 4A-403(a)(1) or 4A-403(a)(2);
or

(3) 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 (i) one hour after that time, or (ii) 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.

(c) Acceptance of a payment order cannot occur before the order is received by the receiving bank. Acceptance does not occur
under subsection (b)(2) or (b)(3) 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.

(d) 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 Section 4A-211(b), the bank may recover from the beneficiary any
payment received to the extent allowed by the law governing mistake and restitution.

68 Del. Laws, c. 430, § 1.;

§ 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 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, (i) any means complying with the agreement is reasonable and (ii) any means not complying
is not reasonable unless no significant delay in receipt of the notice resulted from the use of the noncomplying means.

(b) 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 Section
4A-211(d) 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.

(c) If a receiving bank suspends payments, all unaccepted payment orders issued to it are deemed rejected at the time the
bank suspends payments.

(d) Acceptance of a payment order precludes a later rejection of the order. Rejection of a payment order precludes a later
acceptance of the order.

68 Del. Laws, c. 430, § 1.;

§ 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 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.

(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 (i) that is a duplicate of a payment order previously issued by the sender,
(ii) that orders payment to a beneficiary not entitled to receive payment from the originator, or (iii) 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's 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)(2).

68 Del. Laws, c. 430, § 1.;

§ 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 in this Article, 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 Article or by express agreement. Liability based on acceptance arises only when acceptance occurs
as stated in Section 4A-209, and liability is limited to that provided in this Article. 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 Article or by express agreement.

68 Del. Laws, c. 430, § 1.;