400.4A-303. Erroneous execution of payment order. - Missouri Statutes

Erroneous execution of payment order.

400.4A-303. (a) A receiving bank that (i) executes thepayment order of the sender by issuing a payment order in anamount greater than the amount of the sender's order, or (ii)issues a payment order in execution of the sender's order andthen issues a duplicate order, is entitled to payment of theamount of the sender's order under section 400.4A-402(c) if thatsubsection is otherwise satisfied. The bank is entitled torecover from the beneficiary of the erroneous order the excesspayment received to the extent allowed by the law governingmistake and restitution.

(b) A receiving bank that executes the payment order of thesender by issuing a payment order in an amount less than theamount of the sender's order is entitled to payment of the amountof the sender's order under section 400.4A-402(c) if (i) thatsubsection is otherwise satisfied and (ii) the bank corrects itsmistake by issuing an additional payment order for the benefit ofthe beneficiary of the sender's order. If the error is notcorrected, the issuer of the erroneous order is entitled toreceive or retain payment from the sender of the order itaccepted only to the extent of the amount of the erroneous order.This subsection does not apply if the receiving bank executes thesender's payment order by issuing a payment order in an amountless than the amount of the sender's order for the purpose ofobtaining payment of its charges for services and expensespursuant to instruction of the sender.

(c) If a receiving bank executes the payment order of thesender by issuing a payment order to a beneficiary different fromthe beneficiary of the sender's order and the funds transfer iscompleted on the basis of that error, the sender of the paymentorder that was erroneously executed and all previous senders inthe funds transfer are not obliged to pay the payment orders theyissued. The issuer of the erroneous order is entitled to recoverfrom the beneficiary of the order the payment received to theextent allowed by the law governing mistake and restitution.

(L. 1992 S.B. 448)