§ 6A-4.1-202 Authorized and verifiedpayment orders. – (a) A payment order received by the receiving bank is the authorized order ofthe person identified as sender if that person authorized the order or isotherwise bound by it under the law of agency.
(b) If a bank and its customer have agreed that theauthenticity of payment orders issued to the bank in the name of the customeras sender will be verified pursuant to a security procedure, a payment orderreceived by the receiving bank is effective as the order of the customerwhether or not authorized, if (i) the security procedure is a commerciallyreasonable method of providing security against unauthorized payment orders,and (ii) the bank provides that it accepted the payment order in good faith andin compliance with the security procedure and any written agreement orinstruction of the customer restricting acceptance of payment orders issued inthe name of the customer. The bank is not required to follow an instructionthat violates a written agreement with the customer or notice of which is notreceived at a time and in a manner affording the bank a reasonable opportunityto act on it before the payment order is accepted.
(c) Commercial reasonableness of a security procedure is aquestion of law to be determined by considering the wishes of the customerexpressed to the bank, the circumstances of the customer known to the bank,including the mix, type, and frequency of payment orders normally issued by thecustomer to the bank, alternative security procedures offered to the customer,and security procedures in general use by customers and receiving bankssimilarly situated. A security procedure is deemed to be commerciallyreasonable if (i) the security procedure was chosen by the customer after thebank offered, and the customer refused, a security procedure that wascommercially reasonable for that customer, and (ii) the customer expresslyagreed 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 securityprocedure chosen by the customer.
(d) The term "sender" in this chapter includes the customerin whose name a payment order is issued if the order is the authorized order ofthe customer under subsection (a), or it is effective as the order of thecustomer under subsection (b).
(e) This section applies to amendments and cancellations ofpayment orders to the same extent it applies to payment orders.
(f) Except as provided in this section and in §6A-4.1-203(a)(1), rights and obligations arising under this section and §6A-4.1-203 may not be varied by agreement.
§ 6A-4.1-202 Authorized and verifiedpayment orders. – (a) A payment order received by the receiving bank is the authorized order ofthe person identified as sender if that person authorized the order or isotherwise bound by it under the law of agency.
(b) If a bank and its customer have agreed that theauthenticity of payment orders issued to the bank in the name of the customeras sender will be verified pursuant to a security procedure, a payment orderreceived by the receiving bank is effective as the order of the customerwhether or not authorized, if (i) the security procedure is a commerciallyreasonable method of providing security against unauthorized payment orders,and (ii) the bank provides that it accepted the payment order in good faith andin compliance with the security procedure and any written agreement orinstruction of the customer restricting acceptance of payment orders issued inthe name of the customer. The bank is not required to follow an instructionthat violates a written agreement with the customer or notice of which is notreceived at a time and in a manner affording the bank a reasonable opportunityto act on it before the payment order is accepted.
(c) Commercial reasonableness of a security procedure is aquestion of law to be determined by considering the wishes of the customerexpressed to the bank, the circumstances of the customer known to the bank,including the mix, type, and frequency of payment orders normally issued by thecustomer to the bank, alternative security procedures offered to the customer,and security procedures in general use by customers and receiving bankssimilarly situated. A security procedure is deemed to be commerciallyreasonable if (i) the security procedure was chosen by the customer after thebank offered, and the customer refused, a security procedure that wascommercially reasonable for that customer, and (ii) the customer expresslyagreed 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 securityprocedure chosen by the customer.
(d) The term "sender" in this chapter includes the customerin whose name a payment order is issued if the order is the authorized order ofthe customer under subsection (a), or it is effective as the order of thecustomer under subsection (b).
(e) This section applies to amendments and cancellations ofpayment orders to the same extent it applies to payment orders.
(f) Except as provided in this section and in §6A-4.1-203(a)(1), rights and obligations arising under this section and §6A-4.1-203 may not be varied by agreement.
§ 6A-4.1-202 Authorized and verifiedpayment orders. – (a) A payment order received by the receiving bank is the authorized order ofthe person identified as sender if that person authorized the order or isotherwise bound by it under the law of agency.
(b) If a bank and its customer have agreed that theauthenticity of payment orders issued to the bank in the name of the customeras sender will be verified pursuant to a security procedure, a payment orderreceived by the receiving bank is effective as the order of the customerwhether or not authorized, if (i) the security procedure is a commerciallyreasonable method of providing security against unauthorized payment orders,and (ii) the bank provides that it accepted the payment order in good faith andin compliance with the security procedure and any written agreement orinstruction of the customer restricting acceptance of payment orders issued inthe name of the customer. The bank is not required to follow an instructionthat violates a written agreement with the customer or notice of which is notreceived at a time and in a manner affording the bank a reasonable opportunityto act on it before the payment order is accepted.
(c) Commercial reasonableness of a security procedure is aquestion of law to be determined by considering the wishes of the customerexpressed to the bank, the circumstances of the customer known to the bank,including the mix, type, and frequency of payment orders normally issued by thecustomer to the bank, alternative security procedures offered to the customer,and security procedures in general use by customers and receiving bankssimilarly situated. A security procedure is deemed to be commerciallyreasonable if (i) the security procedure was chosen by the customer after thebank offered, and the customer refused, a security procedure that wascommercially reasonable for that customer, and (ii) the customer expresslyagreed 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 securityprocedure chosen by the customer.
(d) The term "sender" in this chapter includes the customerin whose name a payment order is issued if the order is the authorized order ofthe customer under subsection (a), or it is effective as the order of thecustomer under subsection (b).
(e) This section applies to amendments and cancellations ofpayment orders to the same extent it applies to payment orders.
(f) Except as provided in this section and in §6A-4.1-203(a)(1), rights and obligations arising under this section and §6A-4.1-203 may not be varied by agreement.
