11301-11305

COMMERCIAL CODE
SECTION 11301-11305




11301.  (a) A payment order is "executed" by the receiving bank when
it issues a payment order intended to carry out the payment order
received by the bank. A payment order received by the beneficiary's
bank can be accepted but cannot be executed.
   (b) "Execution date" of a payment order means the day on which the
receiving bank may properly issue a payment order in execution of
the sender's order. The execution date may be determined by
instruction of the sender but cannot be earlier than the day the
order is received and, unless otherwise determined, is the day the
order is received. If the sender's instruction states a payment date,
the execution date is the payment date or an earlier date on which
execution is reasonably necessary to allow payment to the beneficiary
on the payment date.



11302.  (a) Except as provided in subdivisions (b) to (d),
inclusive, if the receiving bank accepts a payment order pursuant to
subdivision (a) of Section 11209, the bank has the following
obligations in executing the order:
   (1) The receiving bank is obliged to issue, on the execution date,
a payment order complying with the sender's order and to follow the
sender's instructions concerning (i) any intermediary bank or
funds-transfer system to be used in carrying out the funds transfer,
or (ii) the means by which payment orders are to be transmitted in
the funds transfer. If the originator's bank issues a payment order
to an intermediary bank, the originator's bank is obliged to instruct
the intermediary bank according to the instruction of the
originator. An intermediary bank in the funds transfer is similarly
bound by an instruction given to it by the sender of the payment
order it accepts.
   (2) If the sender's instruction states that the funds transfer is
to be carried out telephonically or by wire transfer or otherwise
indicates that the funds transfer is to be carried out by the most
expeditious means, the receiving bank is obliged to transmit its
payment order by the most expeditious available means, and to
instruct any intermediary bank accordingly. If a sender's instruction
states a payment date, the receiving bank is obliged to transmit its
payment order at a time and by means reasonably necessary to allow
payment to the beneficiary on the payment date or as soon thereafter
as is feasible.
   (b) Unless otherwise instructed, a receiving bank executing a
payment order may (i) use any funds-transfer system if use of that
system is reasonable in the circumstances, and (ii) issue a payment
order to the beneficiary's bank or to an intermediary bank through
which a payment order conforming to the sender's order can
expeditiously be issued to the beneficiary's bank if the receiving
bank exercises ordinary care in the selection of the intermediary
bank. A receiving bank is not required to follow an instruction of
the sender designating a funds-transfer system to be used in carrying
out the funds transfer if the receiving bank, in good faith,
determines that it is not feasible to follow the instruction or that
following the instruction would unduly delay completion of the funds
transfer.
   (c) Unless paragraph (2) of subdivision (a) applies or the
receiving bank is otherwise instructed, the bank may execute a
payment order by transmitting its payment order by first-class mail
or by any means reasonable in the circumstances. If the receiving
bank is instructed to execute the sender's order by transmitting its
payment order by a particular means, the receiving bank may issue its
payment order by the means stated or by any means as expeditious as
the means stated.
   (d) Unless instructed by the sender, (i) the receiving bank may
not obtain payment of its charges for services and expenses in
connection with the execution of the sender's order by issuing a
payment order in an amount equal to the amount of the sender's order
less the amount of the charges, and (ii) may not instruct a
subsequent receiving bank to obtain payment of its charges in the
same manner.



11303.  (a) A receiving bank that (i) executes the payment order of
the sender by issuing a payment order in an amount greater than the
amount of the sender's order, or (ii) issues a payment order in
execution of the sender's order and then issues a duplicate order, is
entitled to payment of the amount of the sender's order under
subdivision (c) of Section 11402 if that subdivision is otherwise
satisfied. The bank is entitled to recover from the beneficiary of
the erroneous order the excess payment received to the extent allowed
by the law governing mistake and restitution.
   (b) A receiving bank that executes the payment order of the sender
by issuing a payment order in an amount less than the amount of the
sender's order is entitled to payment of the amount of the sender's
order under subdivision (c) of Section 11402 if (i) that subdivision
is otherwise satisfied and (ii) the bank corrects its mistake by
issuing an additional payment order for the benefit of the
beneficiary of the sender's order. If the error is not corrected, the
issuer of the erroneous order is entitled to receive or retain
payment from the sender of the order it accepted only to the extent
of the amount of the erroneous order. This subdivision does not apply
if the receiving bank executes the sender's payment order by issuing
a payment order in an amount less than the amount of the sender's
order for the purpose of obtaining payment of its charges for
services and expenses pursuant to instruction of the sender.
   (c) If a receiving bank executes the payment order of the sender
by issuing a payment order to a beneficiary different from the
beneficiary of the sender's order and the funds transfer is completed
on the basis of that error, the sender of the payment order that was
erroneously executed and all previous senders in the funds transfer
are not obliged to pay the payment orders they issued. The issuer of
the erroneous order is entitled to recover from the beneficiary of
the order the payment received to the extent allowed by the law
governing mistake and restitution.



11304.  If the sender of a payment order that is erroneously
executed as stated in Section 11303 receives notification from the
receiving bank that the order was executed or that the sender's
account was debited with respect to the order, the sender has a duty
to exercise ordinary care to determine, on the basis of information
available to the sender, that the order was erroneously executed and
to notify the bank of the relevant facts within a reasonable time not
exceeding 90 days after the notification from the bank was received
by the sender. If the sender fails to perform that duty, the bank is
not obliged to pay interest on any amount refundable to the sender
under subdivision (d) of Section 11402 for the period before the bank
learns of the execution error. The bank is not entitled to any
recovery from the sender on account of a failure by the sender to
perform the duty stated in this section.



11305.  (a) If a funds transfer is completed but execution of a
payment order by the receiving bank in breach of Section 11302
results in delay in payment to the beneficiary, the bank is obliged
to pay interest to either the originator or the beneficiary of the
funds transfer for the period of delay caused by the improper
execution. Except as provided in subdivision (c), additional damages
are not recoverable.
   (b) If execution of a payment order by a receiving bank in breach
of Section 11302 results in (i) noncompletion of the funds transfer,
(ii) failure to use an intermediary bank designated by the
originator, or (iii) issuance of a payment order that does not comply
with the terms of the payment order of the originator, the bank is
liable to the originator for its expenses in the funds transfer and
for incidental expenses and interest losses, to the extent not
covered by subdivision (a), resulting from the improper execution.
Except as provided in subdivision (c), additional damages are not
recoverable.
   (c) In addition to the amounts payable under subdivisions (a) and
(b), damages, including consequential damages, are recoverable to the
extent provided in an express written agreement of the receiving
bank.
   (d) If a receiving bank fails to execute a payment order it was
obliged by express agreement to execute, the receiving bank is liable
to the sender for its expenses in the transaction and for incidental
expenses and interest losses resulting from the failure to execute.
Additional damages, including consequential damages, are recoverable
to the extent provided in an express written agreement of the
receiving bank, but are not otherwise recoverable.
   (e) Reasonable attorney's fees are recoverable if demand for
compensation under subdivision (a) or (b) is made and refused before
an action is brought on the claim. If a claim is made for breach of
an agreement under subdivision (d) and the agreement does not provide
for damages, reasonable attorney's fees are recoverable if demand
for compensation under subdivision (d) is made and refused before an
action is brought on the claim.
   (f) Except as stated in this section, the liability of a receiving
bank under subdivisions (a) and (b) may not be varied by agreement.