California Commercial Code

§ 11205

COM § 11205Div. 11 · Ch. 2

Statute text

(a)If an accepted payment order was transmitted pursuant to a security procedure for the detection of error and the payment order (i) erroneously instructed payment to a beneficiary not intended by the sender, (ii) erroneously instructed payment in an amount greater than the amount intended by the sender, or (iii) was an erroneously transmitted duplicate of a payment order previously sent by the sender, the following rules apply:

(1)If the sender proves that the sender or a person acting on behalf of the sender pursuant to Section 11206 complied with the security procedure and that the error would have been detected if the receiving bank had also complied, the sender is not obliged to pay the order to the extent stated in paragraphs (2) and (3).

(2)If the funds transfer is completed on the basis of an erroneous payment order described in clause (i) or (iii) of this subdivision, the sender is not obliged to pay the order and the receiving bank is entitled to recover from the beneficiary any amount paid to the beneficiary to the extent allowed by the law governing mistake and restitution.

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Legislative history

Added by Stats. 1990, Ch. 125, Sec. 2.