400.4A-404. Obligation of beneficiary's bank to pay and give notice to beneficiary. - Missouri Statutes

Obligation of beneficiary's bank to pay and give notice tobeneficiary.

400.4A-404. (a) Subject to section 400.4A-211(e), section400.4A-405(d), and section 400.4A-405(e), if a beneficiary's bankaccepts a payment order, the bank is obliged to pay the amount ofthe order to the beneficiary of the order. Payment is due on thepayment date of the order, but if acceptance occurs on thepayment date after the close of the funds-transfer business dayof the bank, payment is due on the next funds-transfer businessday. If the bank refuses to pay after demand by the beneficiaryand receipt of notice of particular circumstances that will giverise to consequential damages as a result of nonpayment, thebeneficiary may recover damages resulting from the refusal to payto the extent the bank had notice of the damages, unless the bankproves that it did not pay because of a reasonable doubtconcerning the right of the beneficiary to payment.

(b) If a payment order accepted by the beneficiary's bankinstructs payment to an account of the beneficiary, the bank isobliged to notify the beneficiary of receipt of the order beforemidnight of the next funds-transfer business day following thepayment date. If the payment order does not instruct payment toan account of the beneficiary, the bank is required to notify thebeneficiary only if notice is required by the order. Notice maybe given by first class mail or any other means reasonable in thecircumstances. If the bank fails to give the required notice,the bank is obliged to pay interest to the beneficiary on theamount of the payment order from the day notice should have beengiven until the day the beneficiary learned of receipt of thepayment order by the bank. No other damages are recoverable.Reasonable attorney's fees are also recoverable if demand forinterest is made and refused before an action is brought on theclaim.

(c) The right of a beneficiary to receive payment anddamages as stated in subsection (a) may not be varied byagreement or a funds-transfer system rule. The right of abeneficiary to be notified as stated in subsection (b) may bevaried by agreement of the beneficiary or by a funds-transfersystem rule if the beneficiary is notified of the rule beforeinitiation of the funds transfer.

(L. 1992 S.B. 448)