§ 4A402. Obligation of sender to pay receiving bank.

(a) Scope of section.--This section is subject to sections 4A205 (relating to erroneous payment orders) and 4A207 (relating to misdescription of beneficiary).

(b) Payment order issued to beneficiary's bank.--With respect to a payment order issued to the beneficiary's bank, acceptance of the order by the bank obliges the sender to pay the bank the amount of the order, but payment is not due until the payment date of the order.

(c) Payment order issued to receiving bank other than beneficiary's bank.--This subsection is subject to subsection (e) and to section 4A303 (relating to erroneous execution of payment order). With respect to a payment order issued to a receiving bank other than the beneficiary's bank, acceptance of the order by the receiving bank obliges 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 obligation of that sender to pay its payment order is excused if the funds transfer is not completed by acceptance by the beneficiary's bank of a payment order instructing payment to the beneficiary of that sender's payment order.

(d) Refund.--If the sender of a payment order pays the order and was not obliged to pay all or part of the amount paid, the bank receiving payment is obliged to refund payment to the extent the sender was not obliged to pay. Except as provided in sections 4A204 (relating to refund of payment and duty of customer to report with respect to unauthorized payment order) and 4A304 (relating to duty of sender to report erroneously executed payment order), interest is payable on the refundable amount from the date of payment.

(e) Certain subrogation rights.--If a funds transfer is not completed as stated in subsection (c) and an intermediary bank is obliged to refund payment as stated in subsection (d) but is unable to do so because not permitted by applicable law or because the bank suspends payments, a sender in the funds transfer that executed a payment order in compliance with an instruction, as stated in section 4A302(a)(1) (relating to obligations of receiving bank in execution of payment order), to route the funds transfer through that intermediary bank is entitled to receive or retain payment from the sender of the payment order that it accepted. The first sender in the funds transfer that issued an instruction requiring routing through that intermediary bank is subrogated to the right of the bank that paid the intermediary bank to refund as stated in subsection (d).

(f) Prohibition against modification by agreement of certain rights of sender.--The right of the sender of a payment order to be excused from the obligation to pay the order as stated in subsection (c) or to receive refund under subsection (d) may not be varied by agreement.

Cross References. Section 4A402 is referred to in sections 4A303, 4A304, 4A403, 4A405 of this title.