New Jersey § 12a:4a-405

§ 12a:4a-405.

(1) If the beneficiary's bank credits an account of the beneficiary of a payment order,

payment of the bank's obligation under section 12A:4A-404(1) occurs when and to the extent (i) the beneficiary is notified of the right to withdraw

the credit, (ii) the bank lawfully applies the credit to a debt of the beneficiary,

or (iii) funds with respect to the order are otherwise made available to the beneficiary

by the bank. (2) If the beneficiary's bank does not credit an account of the beneficiary of a payment

order, the time when payment of the bank's obligation under section 12A:4A-404(1) occurs is governed by principles of law that determine when an obligation is satisfied. (3) Except as stated in subsections (4) and (5), if the beneficiary's bank pays the

beneficiary of a payment order under a condition to payment or agreement of the beneficiary

giving the bank the right to recover payment from the beneficiary if the bank does

not receive payment of the order, the condition to payment or agreement is not enforceable. (4) A funds-transfer system rule may provide that payments made to beneficiaries of

funds transfers made through the system are provisional until receipt of payment by

the beneficiary's bank of the payment order it accepted. A beneficiary's bank that makes a payment that is provisional under the rule is

entitled to refund from the beneficiary if (i) the rule requires that both the beneficiary

and the originator be given notice of the provisional nature of the payment before

the funds transfer is initiated, (ii) the beneficiary, the beneficiary's bank and

the originator's bank agreed to be bound by the rule, and (iii) the beneficiary's

bank did not receive payment of the payment order that it accepted. If the beneficiary is obliged to refund payment to the beneficiary's bank, acceptance

of the payment order by the beneficiary's bank is nullified and no payment by the

originator of the funds transfer to the beneficiary occurs under section 12A:4A-406 . (5) This subsection applies to a funds transfer that includes a payment order transmitted

over a funds-transfer system that (i) nets obligations multilaterally among participants,

and (ii) has in effect a loss-sharing agreement among participants for the purpose

of providing funds necessary to complete settlement of the obligations of one or more

participants that do not meet their settlement obligations. If the beneficiary's bank in the funds transfer accepts a payment order and the

system fails to complete settlement pursuant to its rules with respect to any payment

order in the funds transfer, (i) the acceptance by the beneficiary's bank is nullified

and no person has any right or obligation based on the acceptance, (ii) the beneficiary's

bank is entitled to recover payment from the beneficiary, (iii) no payment by the

originator to the beneficiary occurs under section 12A:4A-406 , and (iv) subject to section 12A:4A-402(5) , each sender in the funds transfer is excused from its obligation to pay its payment

order under section 12A:4A-402(3) because the funds transfer has not been completed.