336.4A-204 REFUND OF PAYMENT AND DUTY OF CUSTOMER TO REPORT WITH
RESPECT TO UNAUTHORIZED PAYMENT ORDER.
(a) If a receiving bank accepts a payment order issued in the name of its customer as
sender which is (i) not authorized and not effective as the order of the customer under section
, or (ii) not enforceable, in whole or in part, against the customer under section
, the bank shall refund any payment of the payment order received from the customer
to the extent the bank is not entitled to enforce payment and shall pay interest on the refundable
amount calculated from the date the bank received payment to the date of the refund. However, the
customer is not entitled to interest from the bank on the amount to be refunded if the customer fails
to exercise ordinary care to determine that the order was not authorized by the customer and to
notify the bank of the relevant facts within a reasonable time not exceeding 90 days after the date
the customer received notification from the bank that the order was accepted or that the customer's
account was debited with respect to the order. The bank is not entitled to any recovery from the
customer on account of a failure by the customer to give notification as stated in this section.
(b) Reasonable time under subsection (a) may be fixed by agreement as stated in section
, but the obligation of a receiving bank to refund payment as stated in subsection (a)
may not otherwise be varied by agreement.
History: 1990 c 582 art 1 s 12; 2004 c 162 art 2 s 13