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Can you summarize IACO 554.12402?
UNIFORM COMMERCIAL CODE > Obligation of sender to pay receiving bank.
Short Summary
This section of the Iowa Code, specifically under the Uniform Commercial Code, governs the obligation of the sender to pay the receiving bank in the context of payment orders. When a payment order is issued to the beneficiary’s bank, acceptance of the order by the bank creates an obligation for the sender to pay the bank the amount of the order. However, payment is not due until the payment date specified in the order. If the payment order is issued to a receiving bank other than the beneficiary’s bank, acceptance of the order by the receiving bank also obligates the sender to pay the bank the amount of the sender’s order. Payment by the sender is not due until the execution date of the sender’s order. The sender’s obligation to pay the payment order is excused if the funds transfer is not completed by acceptance by the beneficiary’s bank. If the sender pays the order but was not obligated to pay all or part of the amount, the receiving bank must refund the payment to the extent the sender was not obligated to pay. Interest may be payable on the refundable amount from the date of payment. In certain circumstances where an intermediary bank is unable to refund payment, the sender in the funds transfer that executed a payment order in compliance with an instruction to route the funds transfer through the intermediary bank is entitled to receive or retain payment from the sender of the payment order. The right of the sender to be excused from the obligation to pay the order or to receive a refund may not be varied by agreement.
Whom does it apply to?
Senders of payment orders and receiving banks
What does it govern?
Obligation of sender to pay receiving bank
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Iowa