§490:4A-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 490:4A-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 ninety 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.



(c)  This section applies to amendments to
payment orders to the same extent it applies to payment orders. [L 1991, c 41,
pt of §1]