New Jersey § 12a:4a-202

§ 12a:4a-202.

(1) A payment order received by the receiving bank is the authorized order of the

person identified as sender if that 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 (i) the security procedure

is a commercially reasonable method of providing security against unauthorized payment

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

and in compliance with the security procedure and any written agreement or instruction

of the customer restricting acceptance of payment orders issued in the name of the

customer. The bank is not required to follow an instruction that violates a written agreement

with the customer 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 (i) 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 (ii)

the customer expressly agreed in writing to be bound by any payment order, whether

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

the security procedure chosen by the customer. (4) The term “ sender ” in this chapter 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 provided in this section and in section 12A:4A-203(1)(a) , rights and obligations arising under this section or section 12A:4A-203 may not be varied by agreement.