§25‑4A‑202. Authorized and verified payment orders.
(a) A payment orderreceived by the receiving bank is the authorized order of the person identifiedas sender if that person authorized the order or is otherwise bound by it underthe law of agency.
(b) If a bank and itscustomer have agreed that the authenticity of payment orders issued to the bankin the name of the customer as sender will be verified pursuant to a securityprocedure, a payment order received by the receiving bank is effective as the orderof the customer, whether or not authorized, if (i) the security procedure is acommercially reasonable method of providing security against unauthorizedpayment orders, and (ii) the bank proves that it accepted the payment order ingood faith and in compliance with the security procedure and any writtenagreement or instruction of the customer restricting acceptance of paymentorders issued in the name of the customer. The bank is not required to followan instruction that violates a written agreement with the customer or notice ofwhich is not received at a time and in a manner affording the bank a reasonableopportunity to act on it before the payment order is accepted.
(c) Commercialreasonableness of a security procedure is a question of law to be determined byconsidering the wishes of the customer expressed to the bank, the circumstancesof the customer known to the bank, including the size, type, and frequency ofpayment orders normally issued by the customer to the bank, alternativesecurity procedures offered to the customer, and security procedures in generaluse by customers and receiving banks similarly situated. A security procedureis deemed to be commercially reasonable if (i) the security procedure waschosen by the customer after the bank offered, and the customer refused, asecurity 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 incompliance with the security procedure chosen by the customer.
(d) The term"sender" in this Article includes the customer in whose name apayment order is issued if the order is the authorized order of the customerunder subsection (a), or it is effective as the order of the customer undersubsection (b).
(e) This sectionapplies to amendments and cancellations of payment orders to the same extent itapplies to payment orders.
(f) Except as providedin this section and in G.S. 25‑4A‑203(a)(1), rights and obligationsarising under this section or G.S. 25‑4A‑203 may not be varied byagreement. (1993, c. 157, s. 1.)
§25‑4A‑202. Authorized and verified payment orders.
(a) A payment orderreceived by the receiving bank is the authorized order of the person identifiedas sender if that person authorized the order or is otherwise bound by it underthe law of agency.
(b) If a bank and itscustomer have agreed that the authenticity of payment orders issued to the bankin the name of the customer as sender will be verified pursuant to a securityprocedure, a payment order received by the receiving bank is effective as the orderof the customer, whether or not authorized, if (i) the security procedure is acommercially reasonable method of providing security against unauthorizedpayment orders, and (ii) the bank proves that it accepted the payment order ingood faith and in compliance with the security procedure and any writtenagreement or instruction of the customer restricting acceptance of paymentorders issued in the name of the customer. The bank is not required to followan instruction that violates a written agreement with the customer or notice ofwhich is not received at a time and in a manner affording the bank a reasonableopportunity to act on it before the payment order is accepted.
(c) Commercialreasonableness of a security procedure is a question of law to be determined byconsidering the wishes of the customer expressed to the bank, the circumstancesof the customer known to the bank, including the size, type, and frequency ofpayment orders normally issued by the customer to the bank, alternativesecurity procedures offered to the customer, and security procedures in generaluse by customers and receiving banks similarly situated. A security procedureis deemed to be commercially reasonable if (i) the security procedure waschosen by the customer after the bank offered, and the customer refused, asecurity 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 incompliance with the security procedure chosen by the customer.
(d) The term"sender" in this Article includes the customer in whose name apayment order is issued if the order is the authorized order of the customerunder subsection (a), or it is effective as the order of the customer undersubsection (b).
(e) This sectionapplies to amendments and cancellations of payment orders to the same extent itapplies to payment orders.
(f) Except as providedin this section and in G.S. 25‑4A‑203(a)(1), rights and obligationsarising under this section or G.S. 25‑4A‑203 may not be varied byagreement. (1993, c. 157, s. 1.)
§25‑4A‑202. Authorized and verified payment orders.
(a) A payment orderreceived by the receiving bank is the authorized order of the person identifiedas sender if that person authorized the order or is otherwise bound by it underthe law of agency.
(b) If a bank and itscustomer have agreed that the authenticity of payment orders issued to the bankin the name of the customer as sender will be verified pursuant to a securityprocedure, a payment order received by the receiving bank is effective as the orderof the customer, whether or not authorized, if (i) the security procedure is acommercially reasonable method of providing security against unauthorizedpayment orders, and (ii) the bank proves that it accepted the payment order ingood faith and in compliance with the security procedure and any writtenagreement or instruction of the customer restricting acceptance of paymentorders issued in the name of the customer. The bank is not required to followan instruction that violates a written agreement with the customer or notice ofwhich is not received at a time and in a manner affording the bank a reasonableopportunity to act on it before the payment order is accepted.
(c) Commercialreasonableness of a security procedure is a question of law to be determined byconsidering the wishes of the customer expressed to the bank, the circumstancesof the customer known to the bank, including the size, type, and frequency ofpayment orders normally issued by the customer to the bank, alternativesecurity procedures offered to the customer, and security procedures in generaluse by customers and receiving banks similarly situated. A security procedureis deemed to be commercially reasonable if (i) the security procedure waschosen by the customer after the bank offered, and the customer refused, asecurity 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 incompliance with the security procedure chosen by the customer.
(d) The term"sender" in this Article includes the customer in whose name apayment order is issued if the order is the authorized order of the customerunder subsection (a), or it is effective as the order of the customer undersubsection (b).
(e) This sectionapplies to amendments and cancellations of payment orders to the same extent itapplies to payment orders.
(f) Except as providedin this section and in G.S. 25‑4A‑203(a)(1), rights and obligationsarising under this section or G.S. 25‑4A‑203 may not be varied byagreement. (1993, c. 157, s. 1.)
