Michigan Laws 440.4902 – Payment order issued to beneficiary or receiving bank subject to MCL 440.4705 and 440.4707; payment by sender; refund; right of sender executing payment order to receive or retain payment; right of se
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(1) This section is subject to sections 4A205 and 4A207.
(2) 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.
Terms Used In Michigan Laws 440.4902
- 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
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: means the person to be paid by the beneficiary's bank. See Michigan Laws 440.4603
- Funds transfer: means the series of transactions, beginning with the originator's payment order, made for the purpose of making payment to the beneficiary of the order. See Michigan Laws 440.4604
- Intermediary bank: means a receiving bank other than the originator's bank or the beneficiary's bank. See Michigan Laws 440.4604
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- 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 Right: includes remedy. See Michigan Laws 440.1201 Sender: means the person giving the instruction to the receiving bank. See Michigan Laws 440.4603
(3) This subsection is subject to subsection (5) and to section 4A303. 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.
(4) 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 and 4A304, interest is payable on the refundable amount from the date of payment.
(5) If a funds transfer is not completed as stated in subsection (3) and an intermediary bank is obliged to refund payment as stated in subsection (4) 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(1)(a), 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 (4).
(6) The right of the sender of a payment order to be excused from the obligation to pay the order as stated in subsection (3) or to receive refund under subsection (4) may not be varied by agreement.