4-A-207 - Misdescription of Beneficiary.

Section 4-A-207. Misdescription of Beneficiary. (1)  Subject to subsection (2), 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),  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  (i)  a payment order described in subsection (2) 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  paragraph (a) of  subsection (2), the following rules apply: (a) If the originator is a bank, the originator is obliged to pay its order. (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 paragraph (a)  of  subsection  (2),  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), 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.