4-A-302 - Obligations of Receiving Bank in Execution of Payment Order.

Section 4-A-302. Obligations  of  Receiving Bank in Execution of Payment Order. (1) Except  as  provided  in  subsections  (2)  through  (4);  if  the  receiving  bank  accepts  a  payment order pursuant to subsection (1) of  Section 4-A-209, the bank has the following obligations in executing the  order: (a) The receiving bank is obliged  to  issue,  on  the  execution date,  a  payment order complying with the sender's order and to  follow  the  sender's  instructions  concerning  (i)  any intermediary  bank  or  funds-transfer  system  to be used in carrying out the funds transfer, or (ii) the means  by  which payment  orders  are to be transmitted in the funds transfer. If the  originator's  bank  issues  a  payment  order  to  an intermediary  bank,  the  originator's  bank  is  obliged  to instruct the intermediary bank according to  the  instruction of the originator. An intermediary bank in the funds transfer is  similarly  bound  by  an  instruction  given to it by the sender of the payment order it accepts. (b) If the sender's instruction states that the funds transfer is to be carried out  telephonically  or  by  wire  transfer  or otherwise  indicates that the funds transfer is to be carried out by the most expeditious  means,  the  receiving  bank  is obliged to transmit its payment order by the most expeditious available  means,  and  to  instruct  any  intermediary  bank accordingly. If a sender's instruction states a payment date, the receiving bank is obliged to transmit its  payment  order at  a time and by means reasonably necessary to allow payment to the beneficiary on the payment date or as soon  thereafter as is feasible. (2)  Unless otherwise instructed, a receiving bank executing a payment  order may (i) use any funds-transfer system if use  of  that  system  is  reasonable  in  the circumstances, and (ii) issue a payment order to the  beneficiary's bank or to an intermediary bank through  which  a  payment  order  conforming  to  the sender's order can expeditiously be issued to  the beneficiary's bank if the receiving bank exercises ordinary care  in  the selection of the intermediary bank. A receiving bank is not required  to  follow  an  instruction  of  the sender designating a funds-transfer  system to be used in carrying out the funds transfer  if  the  receiving  bank,  in  good  faith, determines that it is not feasible to follow the  instruction  or  that  following  the  instruction  would  unduly  delay  completion of the funds transfer. (3)  Unless  paragraph  (b) of subsection (1) applies or the receiving  bank is otherwise instructed, the bank may execute a  payment  order  by  transmitting  its  payment  order  by  first  class mail or by any means  reasonable in the circumstances. If the receiving bank is instructed  to  execute  the  sender's  order  by  transmitting  its  payment order by a  particular means, the receiving bank may issue its payment order by  the  means stated or by any means as expeditious as the means stated. (4)  Unless  instructed  by  the sender (i) the receiving bank may not  obtain payment of its charges for services and  expenses  in  connection  with  the  execution of the sender's order by issuing a payment order in  an amount equal to the amount of the sender's order less the  amount  of  the  charges,  and  (ii) may not instruct a subsequent receiving bank to  obtain payment of its charges in the same manner.