400.4A-305. Liability for late or improper execution or failure to execute payment order. - Missouri Statutes

Liability for late or improper execution or failure to executepayment order.

400.4A-305. (a) If a funds transfer is completed butexecution of a payment order by the receiving bank in breach ofsection 400.4A-302 results in delay in payment to thebeneficiary, the bank is obliged to pay interest to either theoriginator or the beneficiary of the funds transfer for theperiod of delay caused by the improper execution. Except asprovided in subsection (c), additional damages are notrecoverable.

(b) If execution of a payment order by a receiving bank inbreach of section 400.4A-302 results in (i) noncompletion of thefunds transfer, (ii) failure to use an intermediary bankdesignated by the originator, or (iii) issuance of a paymentorder that does not comply with the terms of the payment order ofthe originator, the bank is liable to the originator for itsexpenses in the funds transfer and for incidental expenses andinterest losses, to the extent not covered by subsection (a),resulting from the improper execution. Except as provided insubsection (c), additional damages are not recoverable.

(c) In addition to the amounts payable under subsections(a) and (b), damages, including consequential damages, arerecoverable to the extent provided in an express writtenagreement of the receiving bank.

(d) If a receiving bank fails to execute a payment order itwas obliged by express agreement to execute, the receiving bankis liable to the sender for its expenses in the transaction andfor incidental expenses and interest losses resulting from thefailure to execute. Additional damages, including consequentialdamages, are recoverable to the extent provided in an expresswritten agreement of the receiving bank, but are not otherwiserecoverable.

(e) Reasonable attorney's fees are recoverable if demandfor compensation under subsection (a) or (b) is made and refusedbefore an action is brought on the claim. If a claim is made forbreach of an agreement under subsection (d) and the agreementdoes not provide for damages, reasonable attorney's fees arerecoverable if demand for compensation under subsection (d) ismade and refused before an action is brought on the claim.

(f) Except as stated in this section, the liability of areceiving bank under subsections (a) and (b) may not be varied byagreement.

(L. 1992 S.B. 448)