Nevada § 104A.4202 - Authorized and verified payment orders

§ 104A.4202. Authorized and verified payment orders

1. A payment order received by the receiving bank is the authorized order of the person

identified as sender if the person authorized the order or is otherwise bound by it

under the law of agency. 2. If a bank and its customer have agreed that the authenticity of payment orders

issued to the bank in the name of the customer as sender will be verified pursuant

to a security procedure, a payment order received by the receiving bank is effective

as the order of the customer, whether or not authorized, if the security procedure

is a commercially reasonable method of providing security against unauthorized payment

orders, and the bank proves that it accepted the payment order in good faith and in

compliance with the bank's obligations under the security procedure and any agreement

or instruction of the customer, evidenced by a record, restricting acceptance of payment

orders issued in the name of the customer. The bank is not required to follow an instruction that violates an agreement with

the customer, evidenced by a record, or notice of which is not received at a time

and in a manner affording the bank a reasonable opportunity to act on it before the

payment order is accepted. 3. Commercial reasonableness of a security procedure is a question of law to be determined

by considering the wishes of the customer expressed to the bank, the circumstances

of the customer known to the bank, including the size, type and frequency of payment

orders normally issued by the customer to the bank, alternative security procedures

offered to the customer, and security procedures in general use by customers and receiving

banks similarly situated. A security procedure is deemed to be commercially reasonable if: (a) The security procedure was chosen by the customer after the bank offered, and

the customer refused, a security procedure that was commercially reasonable for that

customer; and (b) The customer expressly agreed in a record to be bound by any payment order, whether

or not authorized, issued in its name and accepted by the bank in compliance with

the bank's obligations under the security procedure chosen by the customer. 4. The term “ sender ” in this article includes the customer in whose name a payment order is issued if

the order is the authorized order of the customer under subsection 1, or it is effective

as the order of the customer under subsection 2. 5. This section applies to amendments and cancellations of payment orders to the same

extent it applies to payment orders. 6. Except as otherwise provided in this section and in paragraph (a) of subsection

1 of NRS 104A.4203 , rights and obligations arising under this section or NRS 104A.4203 may not be varied by agreement.