§ 25-4A-404. Obligation of beneficiary's bank to pay and give notice to beneficiary. - North Carolina Statutes

§25‑4A‑404.  Obligation of beneficiary's bank to pay and give noticeto beneficiary.

(a)        Subject to G.S. 25‑4A‑211(e),25‑4A‑405(d), and 25‑4A‑405(e), if a beneficiary's bankaccepts a payment order, the bank is obliged to pay the amount of the order tothe beneficiary of the order.  Payment is due on the payment date of the order,but if acceptance occurs on the payment date after the close of the funds‑transferbusiness day of the bank, payment is due on the next funds‑transferbusiness day.  If the bank refuses to pay after demand by the beneficiary andreceipt of notice of particular circumstances that will give rise toconsequential damages as a result of nonpayment, the beneficiary may recoverdamages resulting from the refusal to pay to the extent the bank had notice ofthe damages, unless the bank proves that it did not pay because of a reasonabledoubt concerning the right of the beneficiary to payment.

(b)        If a payment orderaccepted by the beneficiary's bank instructs payment to an account of the beneficiary,the bank is obliged to notify the beneficiary of receipt of the order beforemidnight of the next funds‑transfer business day following the paymentdate.  If the payment order does not instruct payment to an account of thebeneficiary, the bank is required to notify the beneficiary only if notice isrequired by the order.  Notice may be given by first‑class mail or anyother means reasonable in the circumstances.  If the bank fails to give therequired notice, the bank is obliged to pay interest to the beneficiary on theamount of the payment order from the day notice should have been given untilthe day the beneficiary learned of receipt of the payment order by the bank. No other damages are recoverable.  Reasonable attorneys' fees are also recoverableif demand for interest is made and refused before an action is brought on theclaim.

(c)        The right of abeneficiary to receive payment and damages as stated in subsection (a) may notbe varied by agreement or a funds‑transfer system rule.  The right of abeneficiary to be notified as stated in subsection (b) may be varied byagreement of the beneficiary or by a funds‑transfer system rule if thebeneficiary is notified of the rule before initiation of the funds transfer. (1993,c. 157, s. 1.)