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Managing. The risk of Payment System - Turner P.

Turner P. Managing. The risk of Payment System - John Wiley & Sons, 2003. - 253 p.
ISBN 0-471-32848-0
Download (direct link): managingtherisksofpayment2003.pdf
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2. Official Comment 1 to U.C.C. § 4A-209.
3. U.C.C. § 4A-210(b).
4. U.C.C. § 4A-301(b). Also see Official Comment 1 to U.C.C. § 4A-301.
5. Id. An unexecuted payment order is canceled by operation of law under U.C.C. § 4A-211(d) at the close of the fifth funds-transfer business day of the receiving bank after the execution date or payment date of the order.
6. U.C.C. § 4A-506(b).
7. U.C.C. § 4A-210(a).
8. U.C.C. § 4A-210(b). In the case of a beneficiary’s bank, the rejection also prevents acceptance by inaction. See Official Comment 2 to U.C.C. § 4A-210.
9. U.C.C. § 4A-210(a).
10. Official Comment 1 to U.C.C. § 4A-211.
11. U.C.C. § 4A-211(b).
12. U.C.C. § 4A-211(a). Payment orders may be transmitted the same way under U.C.C. § 4A-103(a).
13. U.C.C. § 4A-211(a). The drafting of this provision is not as clear as it might be. First, it could be clearer that the provision refers to security procedures to verify the authenticity of the originator’s instructions as opposed to security procedures for the detection of the originator’s errors. U.C.C. § 4A-201. Second, the provision seems to suggest that the bank may simply ignore the cancellation or amendment instructions by declining to comply with the security proce-
dure. It seems more likely that the intention of the drafters was to allow the bank to ignore the instructions only after the procedure has been utilized, and, as a result, the instructions appear not to have been authentic.
14. U.C.C. § 4A-211(c).
15. U.C.C. § 4A-106(a) refers to U.C.C. § 1-201(27).
16. Official Comment 3 to U.C.C. § 4A-211.
17. U.C.C. § 4A-211(c). There is an exception, however, to the
rule that a payment order may not be canceled or amended after it has been accepted. A payment order issued to the originator’s bank may not be accepted by the bank prior to the execution date (or prior to the payment date if the
bank is also the originator’s bank in a “book transfer” in
which the originator and the beneficiary use the same bank). Thus, if the originator’s bank executes the order prior to the execution date, the originator may cancel it, leaving the bank with a right to seek recovery from the beneficiary under the law of mistake and restitution. U.C.C. § 4A-209(d).
18. U.C.C. § 4A-211(c). A payment order may also be canceled pursuant to a funds-transfer rule, but such rules generally govern participating banks and not the relationship between the originator and the originator’s bank.
19. U.C.C. § 4A-211(c).
20. Official Comment 3 to U.C.C. § 4A-211.
21. Id.
22. When the beneficiary’s bank has accepted the payment
order, cancellation can occur under U.C.C. § 4A-211(c)
only under the four specified circumstances. See Chapter
5, page 109.
23. U.C.C. § 4A-211(d). The payment date is the date on which
the amount of the order is payable to the beneficiary at the
beneficiary’s bank. The execution date is the date on which the receiving bank may properly issue its payment order in execution of the payment order it has received. See U.C.C. §§ 4A-401 and 4A-301(b).
Wire Transfers
24. Official Comment 7 to U.C.C. § 4A-211.
25. U.C.C. § 4A-211(e).
26. U.C.C. § 4A-211(g). The rule is similar to and based on U.C.C. § 4-405(a) with respect to checks.
27. U.C.C. §§ 4A-209(a) and 4A-301(a).
28. U.C.C. § 4A-301(b). See Official Comment 2 to U.C.C. § 4A-301. If the funds transfer is not an ACH transfer, is entirely within the United States, and is to be carried out electronically, the execution date is the payment date specified in the sender’s order unless the order is received after the payment date.
29. U.C.C. § 4A-302(a).
30. Official Comment 1 to U.C.C. § 4A-302.
31. U.C.C. § 4A-302(b).
32. Official Comment 2 to U.C.C. § 4A-302.
33. U.C.C. § 4A-302(d).
34. Official Comment 3 to U.C.C. § 4A-302.
35. U.C.C. § 4A-305(a).
36. Official Comment 1 to U.C.C. § 4A-305.
37. In addition to the limited damages available under § 4A-305, if the funds transfer is not completed, the originator and other senders may be entitled to a refund of the amount of the transfer under the “money-back guarantee” provisions discussed in the later section Money-Back Guarantee.
38. “Incidental” expenses are not defined. Presumably, the term refers to minor, foreseeable costs incurred by the originator.
39. U.C.C. § 4A-305(b).
40. U.C.C. § 4A-305(c).
41. The seminal decision is in the nineteenth-century English case Hadley v. Baxendale, 9 Ex. 341, 156 Eng. Rep. 145 (1854).
42. Official Comment 2 to U.C.C. § 4A-305.
43. U.C.C. § 4A-305(d). The U.C.C. § 4A-210(b) limit of five
funds-transfer business days on the period for which inter-
est is due would seem not to apply when the bank has expressly agreed to pay the order.
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