Texas Business & Commerce Code
§ 4A.207 — MISDESCRIPTION OF BENEFICIARY
BC § 4A.207Title 1. UNIFORM COMMERCIAL CODE · Ch. 4A. FUNDS TRANSFERS · Art. B. ISSUE AND ACCEPTANCE OF PAYMENT ORDER
Statute text
View on source(a)Subject to Subsection (b), if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of the beneficiary refers to a nonexistent or unidentifiable person or account, no person has rights as a beneficiary of the order and acceptance of the order cannot occur.
(b)If a payment order received by the beneficiary's bank identifies the beneficiary both by name and by an identifying or bank account number and the name and number identify different persons, the following rules apply:
(1)Except as provided in Subsection (c), if the beneficiary's bank does not know that the name and number refer to different persons or if the funds transfer is processed by the beneficiary bank in a fully automated manner, it may rely on the number as the proper identification of the beneficiary of the order. The beneficiary's bank need not determine whether the name and number refer to the same person.
(2)If the beneficiary's bank pays the person identified by name or any individual processing the funds transfer on behalf of the beneficiary bank knows that the name and number identify different persons, no person has rights as beneficiary except the person paid by the beneficiary's bank if that person was entitled to receive payment from the originator of the funds transfer. If no person has rights as beneficiary, acceptance of the order cannot occur.
(c)If (i) a payment order described in Subsection (b) is accepted, (ii) the originator's payment order described the beneficiary inconsistently by name and number, and (iii) the beneficiary's bank pays the person identified by number as permitted by Subsection (b)(1), the following rules apply:
(1)If the originator is a bank, the originator is obliged to pay its order.
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Legislative history
Added by Acts 1993, 73rd Leg., ch. 570, Sec. 7, eff. Sept. 1, 1993.