Pennsylvania § 4A211 - Cancellation and amendment of payment order.

§ 4A211. Cancellation and amendment of payment order.

(a) Communication.--A communication of the sender of a payment order canceling or amending the order may be transmitted to the receiving bank orally or in a record. If a security procedure is in effect between the sender and the receiving bank, the communication is not effective to cancel or amend the order unless the communication is verified pursuant to the security procedure or the bank agrees to the cancellation or amendment.

(b) Communication received before payment order accepted.--Subject to subsection (a), a communication by the sender canceling or amending a payment order is effective to cancel or amend the order if notice of the communication is received at a time and in a manner affording the receiving bank a reasonable opportunity to act on the communication before the bank accepts the payment order.

(c) Communication received after payment order accepted.--After a payment order has been accepted, cancellation or amendment of the order is not effective unless the receiving bank agrees or a funds-transfer system rule allows cancellation or amendment without agreement of the bank:

(1) With respect to a payment order accepted by a receiving bank other than the beneficiary's bank, cancellation or amendment is not effective unless a conforming cancellation or amendment of the payment order issued by the receiving bank is also made.

(2) With respect to a payment order accepted by the beneficiary's bank, cancellation or amendment is not effective unless the order was issued in execution of an unauthorized payment order or because of a mistake by a sender in the funds transfer which resulted in the issuance of a payment order:

(i) that is a duplicate of a payment order previously issued by the sender;

(ii) that orders payment to a beneficiary not entitled to receive payment from the originator; or

(iii) that orders payment in an amount greater than the amount the beneficiary was entitled to receive from the originator.

If the payment order is canceled or amended, the beneficiary's bank is entitled to recover from the beneficiary any amount paid to the beneficiary to the extent allowed by the law governing mistake and restitution.

(d) When unaccepted payment order canceled by operation of law.--An unaccepted payment order is canceled by operation of law at the close of the fifth funds-transfer business day of the receiving bank after the execution date or payment date of the order.

(e) Canceled payment order.--A canceled payment order cannot be accepted. If an accepted payment order is canceled, the acceptance is nullified and no person has any right or obligation based on the acceptance. Amendment of a payment order is deemed to be cancellation of the original order at the time of amendment and issue of a new payment order in the amended form at the same time.

(f) Liability of sender.--Unless otherwise provided in an agreement of the parties or in a funds-transfer system rule, if the receiving bank, after accepting a payment order, agrees to cancellation or amendment of the order by the sender or is bound by a funds-transfer system rule allowing cancellation or amendment without the bank's agreement, the sender, whether or not cancellation or amendment is effective, is liable to the bank for any loss and expenses, including reasonable attorney fees, incurred by the bank as a result of the cancellation or amendment or attempted cancellation or amendment.

(g) When payment order revoked by death or incompetency.--A payment order is not revoked by the death or incompetency of the sender unless the receiving bank knows of the death or of an adjudication of incompetency under 20 Pa.C.S. Ch. 55 (relating to incapacitated persons) and has reasonable opportunity to act before acceptance of the order.

(h) When funds-transfer system rule not effective.--A funds-transfer system rule is not effective to the extent it conflicts with subsection (c)(2).

(July 1, 2024, P.L.450, No.41, eff. 60 days)

2024 Amendment. Act 41 amended subsec. (a). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations.

Cross References. Section 4A211 is referred to in sections 4A209, 4A210, 4A404, 4A406 of this title.