400.4A-302. Obligations of receiving bank in execution of payment order. - Missouri Statutes

Obligations of receiving bank in execution of payment order.

400.4A-302. (a) Except as provided in subsections (b)through (d), if the receiving bank accepts a payment orderpursuant to section 400.4A-209(a), the bank has the followingobligations in executing the order:

(1) The receiving bank is obliged to issue, on theexecution date, a payment order complying with the sender's orderand to follow the sender's instructions concerning (i) anyintermediary bank or funds-transfer system to be used in carryingout the funds transfer, or (ii) the means by which payment ordersare to be transmitted in the funds transfer. If the originator'sbank issues a payment order to an intermediary bank, theoriginator's bank is obliged to instruct the intermediary bankaccording to the instruction of the originator. An intermediarybank in the funds transfer is similarly bound by an instructiongiven to it by the sender of the payment order it accepts.

(2) If the sender's instruction states that the fundstransfer is to be carried out telephonically or by wire transferor otherwise indicates that the funds transfer is to be carriedout by the most expeditious means, the receiving bank is obligedto transmit its payment order by the most expeditious availablemeans, and to instruct any intermediary bank accordingly. If asender's instruction states a payment date, the receiving bank isobliged to transmit its payment order at a time and by meansreasonably necessary to allow payment to the beneficiary on thepayment date or as soon thereafter as is feasible.

(b) Unless otherwise instructed, a receiving bank executinga payment order may (i) use any funds-transfer system if use ofthat system is reasonable in the circumstances, and (ii) issue apayment order to the beneficiary's bank or to an intermediarybank through which a payment order conforming to the sender'sorder can expeditiously be issued to the beneficiary's bank ifthe receiving bank exercises ordinary care in the selection ofthe intermediary bank. A receiving bank is not required tofollow an instruction of the sender designating a funds-transfersystem to be used in carrying out the funds transfer if thereceiving bank, in good faith, determines that it is not feasibleto follow the instruction or that following the instruction wouldunduly delay completion of the funds transfer.

(c) Unless subsection (a)(2) applies or the receiving bankis otherwise instructed, the bank may execute a payment order bytransmitting its payment order by first class mail or by anymeans reasonable in the circumstances. If the receiving bank isinstructed to execute the sender's order by transmitting itspayment order by a particular means, the receiving bank may issueits payment order by the means stated or by any means asexpeditious as the means stated.

(d) Unless instructed by the sender, (i) the receiving bankmay not obtain payment of its charges for services and expensesin connection with the execution of the sender's order by issuinga payment order in an amount equal to the amount of the sender'sorder less the amount of the charges, and (ii) may not instruct asubsequent receiving bank to obtain payment of its charges in thesame manner.

(L. 1992 S.B. 448)