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Can you summarize IACO 554.12305?
UNIFORM COMMERCIAL CODE > Liability for late or improper execution or failure to execute payment order.
Short Summary
This legal document, governed by the Iowa Code under the Uniform Commercial Code, addresses the liability of receiving banks for late or improper execution or failure to execute payment orders. If a funds transfer is completed but the receiving bank breaches section 554.12302, resulting in a delay in payment to the beneficiary, the bank is obligated to pay interest to either the originator or the beneficiary for the period of delay caused by the improper execution. If the breach results in noncompletion of the funds transfer, failure to use an intermediary bank designated by the originator, or issuance of a payment order that does not comply with the terms of the originator’s payment order, the bank is liable to the originator for expenses, incidental expenses, and interest losses resulting from the improper execution. Damages, including consequential damages, may be recoverable as provided in an express written agreement of the receiving bank. If a receiving bank fails to execute a payment order it was obligated to execute by express agreement, the bank is liable to the sender for expenses, incidental expenses, and interest losses resulting from the failure to execute. Reasonable attorney’s fees are recoverable if demand for compensation is made and refused before an action is brought on the claim. The liability of a receiving bank under this document may not be varied by agreement, except as stated in the document.
Whom does it apply to?
Receiving banks, originators, and beneficiaries of funds transfers
What does it govern?
Liability for late or improper execution or failure to execute payment order
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
Additional damages, including consequential damages, may be recoverable as provided in an express written agreement of the receiving bank.
Jurisdiction
Iowa