400.4A-205. Erroneous payment orders.

MISSOURI STATUTES AND CODES

400.4A-205. Erroneous payment orders.

Erroneous payment orders.

400.4A-205. (a) If an accepted payment order wastransmitted pursuant to a security procedure for the detection oferror and the payment order (i) erroneously instructed payment toa beneficiary not intended by the sender, (ii) erroneouslyinstructed payment in an amount greater than the amount intendedby the sender, or (iii) was an erroneously transmitted duplicateof a payment order previously sent by the sender, the followingrules apply:

(1) If the sender proves that the sender or a person actingon behalf of the sender pursuant to section 400.4A-206 compliedwith the security procedure and that the error would have beendetected if the receiving bank had also complied, the sender isnot 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 anerroneous payment order described in clause (i) or (iii) ofsubsection (a), the sender is not obliged to pay the order andthe receiving bank is entitled to recover from the beneficiaryany amount paid to the beneficiary to the extent allowed by thelaw governing mistake and restitution.

(3) If the funds transfer is completed on the basis of apayment order described in clause (ii) of subsection (a), thesender is not obliged to pay the order to the extent the amountreceived by the beneficiary is greater than the amount intendedby the sender. In that case, the receiving bank is entitled torecover from the beneficiary the excess amount received to theextent allowed by the law governing mistake and restitution.

(b) If (i) the sender of an erroneous payment orderdescribed in subsection (a) is not obliged to pay all or part ofthe order, and (ii) the sender receives notification from thereceiving bank that the order was accepted by the bank or thatthe sender's account was debited with respect to the order, thesender has a duty to exercise ordinary care, on the basis ofinformation available to the sender, to discover the error withrespect to the order and to advise the bank of the relevant factswithin a reasonable time, not exceeding ninety days, after thebank's notification was received by the sender. If the bankproves that the sender failed to perform that duty, the sender isliable to the bank for the loss the bank proves it incurred as aresult of the failure, but the liability of the sender may notexceed the amount of the sender's order.