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Can you summarize 8.4A VACV Part 3?
Commercial Code Funds Transfers >
Short Summary
This legal document governs the erroneous execution of payment orders in the context of funds transfers. It outlines the entitlements and obligations of receiving banks, senders of payment orders, and beneficiaries of payment orders in case of errors. If a receiving bank executes a payment order in an amount greater than the sender’s order or issues a duplicate order, the bank is entitled to payment of the sender’s order amount and may recover the excess payment from the beneficiary. If a receiving bank executes a payment order in an amount less than the sender’s order, the bank is entitled to payment of the sender’s order amount if it corrects its mistake by issuing an additional payment order for the benefit of the beneficiary. If the error is not corrected, the issuer of the erroneous order is entitled to receive or retain payment only up to the amount of the erroneous order. However, if the funds transfer is completed on the basis of an error where the receiving bank issues a payment order to a different beneficiary, the sender and previous senders are not obliged to pay the payment orders they issued, and the issuer of the erroneous order may recover the payment received from the beneficiary. The document also clarifies that exemptions to these provisions apply when the receiving bank issues a payment order in an amount less than the sender’s order for the purpose of obtaining payment of its charges for services and expenses as instructed by the sender.
Whom does it apply to?
Receiving banks, senders of payment orders, beneficiaries of payment orders
What does it govern?
Erroneous execution of payment orders
What are exemptions?
Exemptions apply when the receiving bank issues a payment order in an amount less than the sender's order for the purpose of obtaining payment of its charges for services and expenses as instructed by the sender.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Virginia