U.C.C. - ARTICLE 4A - FUNDS TRANSFERS
..PART 2. ISSUE AND ACCEPTANCE OF PAYMENT ORDER
§ 4A-207. MISDESCRIPTION OF BENEFICIARY.
- (a) Subject to subsection (b), if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of the beneficiary refers to a nonexistent or unidentifiable person or account, no person has rights as a beneficiary of the order and acceptance of the order cannot occur.
- (b) If a payment
order received by the beneficiary's
bank identifies the beneficiary both
by name and by an identifying or bank account number and the name and number
identify different persons, the following rules apply:
- (1) Except as otherwise provided in subsection (c), if the beneficiary's bank does not know that the name and number refer to different persons, it may rely on the number as the proper identification of the beneficiary of the order. The beneficiary's bank need not determine whether the name and number refer to the same person.
- (2) If the beneficiary's bank pays the person identified by name or knows that the name and number identify different persons, no person has rights as beneficiary except the person paid by the beneficiary's bank if that person was entitled to receive payment from the originator of the funds transfer. If no person has rights as beneficiary, acceptance of the order cannot occur.
- (c) If (i) a payment
order described in subsection (b) is accepted, (ii) the originator's payment
order described the beneficiary inconsistently
by name and number, and (iii) the beneficiary's
bank pays the person identified by number as permitted by subsection (b)(1),
the following rules apply:
- (1) If the originator is a bank, the originator is obliged to pay its order.
- (2) If the originator is
not a bank and proves that
the person identified by number was not entitled to receive payment from
the originator, the originator is not obliged to pay its order unless
the
proves that the originator, before acceptance of the originator's order, had notice that payment of a payment order issued by the originator might be made by the beneficiary's bank on the basis of an identifying or bank account number even if it identifies a person different from the named beneficiary. Proof of notice may be made by any admissible evidence. The originator's bank satisfies the burden of proof if it proves that the originator, before the payment order was accepted, signed a writing stating the information to which the notice relates.
- (d) In a case governed by subsection (b)(1), if
the beneficiary's bank rightfully
pays the person identified by number and that person was not entitled to receive
payment from the originator, the
amount paid may be recovered from that person to the extent allowed by the
law governing mistake and restitution as follows:
- (1) If the originator is obliged to pay its payment order as stated in subsection (c), the originator has the right to recover.
- (2) If the originator is
not a bank and is not obliged to
pay its payment order,
the
has the right to recover.
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© Copyright 2005 by The American Law Institute and the National Conference of Commissioners on Uniform State Laws; reproduced, published and distributed with the permission of the Permanent Editorial Board for the Uniform Commercial Code for the limited purposes of study, teaching, and academic research.