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Can you summarize IACO 554.12205?
UNIFORM COMMERCIAL CODE > Erroneous payment orders.
Short Summary
This section of the Iowa Code, specifically under the Uniform Commercial Code, governs the handling of erroneous payment orders in funds transfers. It outlines the rules and obligations for senders and receiving banks in cases where a payment order is transmitted with errors. If the sender can prove compliance with the security procedure and that the error would have been detected if the receiving bank had also complied, the sender is not obligated to pay the order to the extent stated. If the funds transfer is completed based on an erroneous payment order, the sender is not obligated to pay the order and the receiving bank can recover the amount paid from the beneficiary. If the funds transfer is completed with an amount greater than intended, the sender is not obligated to pay the excess amount, and the receiving bank can recover the excess from the beneficiary. The section also imposes a duty on the sender to exercise ordinary care in discovering and reporting errors within a reasonable time. Amendments to payment orders are also subject to the same rules. No specific penalties are mentioned in this section.
Whom does it apply to?
Senders and receiving banks involved in funds transfers
What does it govern?
Erroneous payment orders
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Iowa