Michigan Laws 440.4804 – Notification from receiving bank of erroneously executed payment order; duties of sender; obligation to pay interest; recovery by bank prohibited
Current as of: 2023 | Check for updates
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Terms Used In Michigan Laws 440.4804
- Bank: means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company. See Michigan Laws 440.4605
- Payment order: means an instruction of a sender to a receiving bank, transmitted orally, electronically, or in writing, to pay, or to cause another bank to pay, a fixed or determinable amount of money to a beneficiary if the following apply:
(i) The instruction does not state a condition to payment to the beneficiary other than time of payment. See Michigan Laws 440.4603Receiving bank: means the bank to which the sender's instruction is addressed. See Michigan Laws 440.4603 Sender: means the person giving the instruction to the receiving bank. See Michigan Laws 440.4603
If the sender of a payment order that is erroneously executed as stated in section 4A303 receives notification from the receiving bank that the order was executed or that the sender’s account was debited with respect to the order, the sender has a duty to exercise ordinary care to determine, on the basis of information available to the sender, that the order was erroneously executed and to notify the bank of the relevant facts within a reasonable time not exceeding 90 days after the notification from the bank was received by the sender. If the sender fails to perform that duty, the bank is not obliged to pay interest on any amount refundable to the sender under section 4A402(4) for the period before the bank learns of the execution error. The bank is not entitled to any recovery from the sender on account of a failure by the sender to perform the duty stated in this section.