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Minnesota Legislature

Office of the Revisor of Statutes

336.4A-302 OBLIGATIONS OF RECEIVING BANK IN EXECUTION OF PAYMENT
ORDER.
(a) Except as provided in subsections (b) through (d), if the receiving bank accepts a
payment order pursuant to section 336.4A-209(a), the bank has the following obligations in
executing the order:
(1) The receiving bank is obliged to issue, on the execution date, a payment order complying
with the sender's order and to follow the sender's instructions concerning (i) any intermediary
bank or funds-transfer system to be used in carrying out the funds transfer, or (ii) the means by
which payment orders are to be transmitted in the funds transfer. If the originator's bank issues a
payment order to an intermediary bank, the originator's bank is obliged to instruct the intermediary
bank according to the instruction of the originator. An intermediary bank in the funds transfer is
similarly bound by an instruction given to it by the sender of the payment order it accepts.
(2) If the sender's instruction states that the funds transfer is to be carried out telephonically
or by wire transfer or otherwise indicates that the funds transfer is to be carried out by the most
expeditious means, the receiving bank is obliged to transmit its payment order by the most
expeditious available means, and to instruct any intermediary bank accordingly. If a sender's
instruction states a payment date, the receiving bank is obliged to transmit its payment order at a
time and by means reasonably necessary to allow payment to the beneficiary on the payment date
or as soon thereafter as is feasible.
(b) Unless otherwise instructed, a receiving bank executing a payment order may (i) use
any funds-transfer system if use of that system is reasonable in the circumstances, and (ii) issue
a payment order to the beneficiary's bank or to an intermediary bank through which a payment
order conforming to the sender's order can expeditiously be issued to the beneficiary's bank if
the receiving bank exercises ordinary care in the selection of the intermediary bank. A receiving
bank is not required to follow an instruction of the sender designating a funds-transfer system to
be used in carrying out the funds transfer if the receiving bank, in good faith, determines that
it is not feasible to follow the instruction or that following the instruction would unduly delay
completion of the funds transfer.
(c) Unless subsection (a)(2) applies or the receiving bank is otherwise instructed, the bank
may execute a payment order by transmitting its payment order by first class mail or by any means
reasonable in the circumstances. If the receiving bank is instructed to execute the sender's order
by transmitting its payment order by a particular means, the receiving bank may issue its payment
order by the means stated or by any means as expeditious as the means stated.
(d) Unless instructed by the sender, (i) the receiving bank may not obtain payment of its
charges for services and expenses in connection with the execution of the sender's order by
issuing a payment order in an amount equal to the amount of the sender's order less the amount
of the charges, and (ii) may not instruct a subsequent receiving bank to obtain payment of its
charges in the same manner.
History: 1990 c 582 art 1 s 22