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Minnesota Legislature

Office of the Revisor of Statutes

(a) A payment order is rejected by the receiving bank by a notice of rejection transmitted to
the sender orally, electronically, or in writing. A notice of rejection need not use any particular
words and is sufficient if it indicates that the receiving bank is rejecting the order or will not
execute or pay the order. Rejection is effective when the notice is given if transmission is by a
means that is reasonable in the circumstances. If notice of rejection is given by a means that is not
reasonable, rejection is effective when the notice is received. If an agreement of the sender and
receiving bank establishes the means to be used to reject a payment order, (i) any means complying
with the agreement is reasonable and (ii) any means not complying is not reasonable unless no
significant delay in receipt of the notice resulted from the use of the noncomplying means.
(b) This subsection applies if a receiving bank other than the beneficiary's bank fails to
execute a payment order despite the existence on the execution date of a withdrawable credit
balance in an authorized account of the sender sufficient to cover the order. If the sender does not
receive notice of rejection of the order on the execution date and the authorized account of the
sender does not bear interest, the bank is obliged to pay interest to the sender on the amount of
the order for the number of days elapsing after the execution date to the earlier of the day the
order is canceled pursuant to section 336.4A-211(d) or the day the sender receives notice or learns
that the order was not executed, counting the final day of the period as an elapsed day. If the
withdrawable credit balance during that period falls below the amount of the order, the amount
of interest is reduced accordingly.
(c) If a receiving bank suspends payments, all unaccepted payment orders issued to it are
deemed rejected at the time the bank suspends payments.
(d) Acceptance of a payment order precludes a later rejection of the order. Rejection of a
payment order precludes a later acceptance of the order.
History: 1990 c 582 art 1 s 18