(810 ILCS 5/Art. 4A Pt. 3 heading)
PART 3.
EXECUTION OF SENDER'S PAYMENT ORDER BY RECEIVING BANK
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(810 ILCS 5/4A-301) (from Ch. 26, par. 4A-301)
Sec. 4A-301.
Execution and execution date.
(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 the execution is reasonably necessary to
allow payment to the beneficiary on the payment date.
(Source: P.A. 86-1291.)
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(810 ILCS 5/4A-302) (from Ch. 26, par. 4A-302)
Sec. 4A-302.
Obligations of receiving bank in execution of payment order.
(a) Except as provided in subsections (b) through (d), if
the receiving bank accepts a payment order pursuant to Section 4A-209(a),
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.
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(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.
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(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 subsection (a)(2) 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.
(Source: P.A. 86-1291.)
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(810 ILCS 5/4A-303) (from Ch. 26, par. 4A-303)
Sec. 4A-303.
Erroneous execution of payment order.
(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 Section 4A-402(c) if that
subsection 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
Section 4A-402(c) if (i) that subsection 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 subsection 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 the 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.
(Source: P.A. 86-1291.)
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(810 ILCS 5/4A-304) (from Ch. 26, par. 4A-304)
Sec. 4A-304.
Duty of sender to report erroneously executed payment order.
If the sender of a payment order that is erroneously executed as stated
in Section 4A-303 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 Section 4A-402(d) 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.
(Source: P.A. 86-1291.)
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(810 ILCS 5/4A-305) (from Ch. 26, par. 4A-305)
Sec. 4A-305.
Liability for late or improper execution or failure to
execute payment order.
(a) If a funds transfer is completed but execution of a payment order by
the receiving bank in breach of Section 4A-302 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 subsection (c),
additional damages are not recoverable.
(b) If execution of a payment order by a receiving bank in breach of
Section 4A-302 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 subsection (a), resulting from the
improper execution. Except as provided in subsection (c), additional
damages are not recoverable.
(c) In addition to the amounts payable under subsections (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 subsection (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 subsection (d) and the agreement does not provide for
damages, reasonable attorney's fees are recoverable if demand for
compensation under subsection (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 subsections (a) and (b) may not be varied by agreement.
(Source: P.A. 86-1291.)
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