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Can you summarize MNST 336.4A-303?
UNIFORM COMMERCIAL CODE > ERRONEOUS EXECUTION OF PAYMENT ORDER.
Short Summary
This legal document governs the erroneous execution of payment orders. It applies to receiving banks, senders of payment orders, and beneficiaries of payment orders. The document outlines the entitlements and obligations of receiving banks in cases where they execute payment orders incorrectly. If a receiving bank issues 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 and can recover the excess payment from the beneficiary. If a receiving bank issues a payment order in an amount less than the sender’s order, the bank is entitled to payment of the sender’s order 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 to the extent of the amount of the erroneous order. However, if the receiving bank executes the payment order to a different beneficiary and the funds transfer is completed based on that error, the sender and previous senders are not obliged to pay the payment orders they issued, and the issuer of the erroneous order can recover the payment received from the beneficiary. The document also mentions that the law governing mistake and restitution determines the extent to which recovery is allowed. No specific penalties are mentioned in the document.
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?
This document 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 instruction of the sender.
What are the Penalties?
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. 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.
Jurisdiction
Minnesota