# Title 41 — Uniform Commercial Code

## Chapter 41-04.1 — Funds Transfers

### § 41-04.1-01. (4A-101) Short title.

This chapter may be cited as Uniform Commercial Code - Funds Transfers.
### § 41-04.1-02. (4A-102) Subject matter.

Except as otherwise provided in section 41-04.1-08, this chapter applies to funds transfers
defined in section 41-04.1-04.
### § 41-04.1-03. (4A-103) Payment order - Definitions.

1. In this chapter:
a. "Beneficiary" means the person to be paid by the beneficiary's bank.
b. "Beneficiary's bank" means the bank identified in a payment order in which an
account of the beneficiary is to be credited pursuant to the order or which
otherwise is to make payment to the beneficiary if the order does not provide for
payment to an account.
c. "Payment order" means an instruction of a sender to a receiving bank,
transmitted orally or in a record, to pay, or to cause another bank to pay, a fixed
or determinable amount of money to a beneficiary if:
(1) The instruction does not state a condition to payment to the beneficiary
other than time of payment.
(2) The receiving bank is to be reimbursed by debiting an account of, or
otherwise receiving payment from, the sender.
(3) The instruction is transmitted by the sender directly to the receiving bank or
to an agent, funds-transfer system, or communication system for transmittal
to the receiving bank.
d. "Receiving bank" means the bank to which the sender's instruction is addressed.
e. "Sender" means the person giving the instruction to the receiving bank.
2. If an instruction complying with subdivision a of subsection 1 is to make more than one
payment to a beneficiary, the instruction is a separate payment order with respect to
each payment.
3. A payment order is issued when it is sent to the receiving bank.
### § 41-04.1-04. (4A-104) Funds transfer - Definitions.

In this chapter:
1. "Funds transfer" means the series of transactions, beginning with the originator's
payment order, made for the purpose of making payment to the beneficiary of the
order. The term includes any payment order issued by the originator's bank or an
intermediary bank intended to carry out the originator's payment order. A funds transfer
is completed by acceptance by the beneficiary's bank of a payment order for the
benefit of the beneficiary of the originator's payment order.
2. "Intermediary bank" means a receiving bank other than the originator's bank or the
beneficiary's bank.
3. "Originator" means the sender of the first payment order in a funds transfer.
4. "Originator's bank" means the receiving bank to which the payment order of the
originator is issued if the originator is not a bank or the originator if the originator is a
bank.
### § 41-04.1-05. (4A-105) Other definitions.

1. In this chapter:
a. "Authorized account" means a deposit account of a customer in a bank
designated by the customer as a source of payment of payment orders issued by
the customer to the bank. If a customer does not so designate an account, any

account of the customer is an authorized account if payment of a payment order
from that account is not inconsistent with a restriction on the use of that account.
b. "Bank" means a person engaged in the business of banking and includes a
savings bank, savings and loan association, credit union, and trust company. A
branch or separate office of a bank is a separate bank for purposes of this
chapter.
c. "Customer" means a person, including a bank, having an account with a bank or
from whom a bank has agreed to receive payment orders.
d. "Funds-transfer business day" of a receiving bank means the part of a day during
which the receiving bank is open for the receipt, processing, and transmittal of
payment orders and cancellations and amendments of payment orders.
e. "Funds-transfer system" means a wire transfer network, automated
clearinghouse, or other communication system of a clearinghouse or other
association of banks through which a payment order by a bank may be
transmitted to the bank to which the order is addressed.
f. (Reserved).
g. "Prove" with respect to a fact means to meet the burden of establishing the fact.
Subdivision h of subsection 2 of section 41-01-09.
2. Other definitions applying to this chapter and the sections in which they appear are:
a. "Acceptance". Section 41-04.1-17.
b. "Beneficiary". Section 41-04.1-03.
c. "Beneficiary's bank". Section 41-04.1-03.
d. "Executed". Section 41-04.1-21.
e. "Execution date". Section 41-04.1-21.
f. "Funds transfer". Section 41-04.1-04.
g. "Funds-transfer system rule". Section 41-04.1-32.
h. "Intermediary bank". Section 41-04.1-04.
i. "Originator". Section 41-04.1-04.
j. "Originator's bank". Section 41-04.1-04.
k. "Payment by beneficiary's bank to beneficiary". Section 41-04.1-30.
l. "Payment by originator to beneficiary". Section 41-04.1-31.
m. "Payment by sender to receiving bank". Section 41-04.1-28.
n. "Payment date". Section 41-04.1-26.
o. "Payment order". Section 41-04.1-03.
p. "Receiving bank". Section 41-04.1-03.
q. "Security procedure". Section 41-04.1-26.
r. "Sender". Section 41-04.1-03.
3. The following definitions in chapter 41-04 apply to this chapter:
a. "Clearinghouse". Section 41-04-04.
b. "Item". Section 41-04-04.
c. "Suspends payments". Section 41-04-04.
4. In addition, chapter 41-01 contains general definitions and principles of construction
and interpretation applicable throughout this chapter.
### § 41-04.1-06. (4A-106) Time payment order is received.

1. The time of receipt of a payment order or communication canceling or amending a
payment order is determined by the rules applicable to receipt of a notice stated under
section 41-01-10. A receiving bank may fix a cutoff time or times on a funds-transfer
business day for the receipt and processing of payment orders and communications
canceling or amending payment orders. Different cutoff times may apply to payment
orders, cancellations, or amendments, or to different categories of payment orders,
cancellations, or amendments. A cutoff time may apply to senders generally or
different cutoff times may apply to different senders or categories of payment orders. If
a payment order or communication canceling or amending a payment order is
received after the close of a funds-transfer business day or after the appropriate cutoff

time on a funds-transfer business day, the receiving bank may treat the payment order
or communication as received at the opening of the next funds-transfer business day.
2. If this chapter refers to an execution date or payment date or states a day on which a
receiving bank is required to take action, and the date or day does not fall on a
funds-transfer business day, the next day that is a funds-transfer business day is
treated as the date or day stated, unless the contrary is stated in this chapter.
### § 41-04.1-07. (4A-107) Federal reserve regulations and operating circulars.

Regulations of the board of governors of the federal reserve system and operating circulars
of the federal reserve banks supersede any inconsistent provision of this chapter to the extent of
the inconsistency.
### § 41-04.1-08. (4A-108) Relationship to Electronic Fund Transfer Act.

1. Except as provided in subsection 2, this chapter does not apply to a funds transfer any
part of which is governed by the Electronic Fund Transfer Act of 1978 [Title XX, Pub. L.
95-630; 92 Stat. 3728; 15 U.S.C. 1693 et seq.].
2. This chapter applies to a funds transfer that is a remittance transfer as defined in the
Electronic Fund Transfer Act [15 U.S.C. 1693o-1], unless the remittance transfer is an
electronic fund transfer as defined in the Electronic Fund Transfer Act [15 U.S.C.
1693a].
3. In a funds transfer to which this chapter applies, in the event of an inconsistency
between an applicable provision of this chapter and an applicable provision of the
Electronic Fund Transfer Act, the provision of the Electronic Fund Transfer Act governs
to the extent of the inconsistency.
### § 41-04.1-09. (4A-201) Security procedure.

"Security procedure" means a procedure established by agreement of a customer and a
receiving bank for the purpose of verifying that a payment order or communication amending or
canceling a payment order is that of the customer or detecting error in the transmission or the
content of the payment order or communication. A security procedure may impose an obligation
on the receiving bank or the customer and may require the use of algorithms or other codes,
identifying words, numbers, symbols, sounds, biometrics, encryption, callback procedures, or
similar security devices. Comparison of a signature on a payment order or communication with
an authorized specimen signature of the customer or requiring a payment order to be sent from
a known electronic mail address, internet protocol address, or telephone number is not by itself
a security procedure.
### § 41-04.1-10. (4A-202) Authorized and verified payment orders.

1. A payment order received by the receiving bank is the authorized order of the person
identified as sender if that person authorized the order or is otherwise bound by it
under the law of agency.
2. If a bank and its customer have agreed that the authenticity of payment orders issued
to the bank in the name of the customer as sender will be verified under a security
procedure, a payment order received by the receiving bank is effective as the order of
the customer, whether or not authorized, if the security procedure is a commercially
reasonable method of providing security against unauthorized payment orders, and
the bank proves that it accepted the payment order in good faith and in compliance
with the bank's obligations under the security procedure and any agreement or
instruction of the customer, evidenced by a record, restricting acceptance of payment
orders issued in the name of the customer. The bank is not required to follow an
instruction that violates an agreement with the customer, evidenced by a record, or
notice of which is not received at a time and in a manner affording the bank a
reasonable opportunity to act on it before the payment order is accepted.
3. Commercial reasonableness of a security procedure is a question of law to be
determined by considering the wishes of the customer expressed to the bank, the

circumstances of the customer known to the bank, including the size, type, and
frequency of payment orders normally issued by the customer to the bank, alternative
security procedures offered to the customer, and security procedures in general use by
customers and receiving banks similarly situated. A security procedure is deemed to
be commercially reasonable if the security procedure was chosen by the customer
after the bank offered, and the customer refused, a security procedure that was
commercially reasonable for that customer, and the customer expressly agreed in a
record to be bound by any payment order, whether or not authorized, issued in its
name and accepted by the bank in compliance with the bank's obligations under the
security procedure chosen by the customer.
4. In this chapter the term "sender" includes the customer in whose name a payment
order is issued if the order is the authorized order of the customer under subsection 1
or is effective as the order of the customer under subsection 2.
5. This section applies to amendments and cancellations of payment orders to the same
extent it applies to payment orders.
6. Except as provided in this section and in subdivision a of subsection 1 of section
41-04.1-11, rights and obligations arising under this section or section 41-04.1-11 may
not be varied by agreement.
### § 41-04.1-11. (4A-203) Unenforceability of certain verified payment orders.

1. If an accepted payment order is not, under subsection 1 of section 41-04.1-10, an
authorized order of a customer identified as sender, but is effective as an order of the
customer under subsection 2 of section 41-04.1-10, the following rules apply:
a. By express agreement evidenced by a record, the receiving bank may limit the
extent to which it is entitled to enforce or retain payment of the payment order.
b. The receiving bank is not entitled to enforce or retain payment of the payment
order if the customer proves that the order was not caused, directly or indirectly,
by a person entrusted at any time with duties to act for the customer with respect
to payment orders or the security procedure or by a person who obtained access
to transmitting facilities of the customer or who obtained, from a source controlled
by the customer and without authority of the receiving bank, information
facilitating breach of the security procedure, regardless of how the information
was obtained or whether the customer was at fault. Information includes any
access device, computer software, or the like.
2. This section applies to amendments of payment orders to the same extent it applies to
payment orders.
### § 41-04.1-12. (4A-204) Refund of payment and duty of customer to report with respect

to unauthorized payment order.
1. If a receiving bank accepts a payment order issued in the name of its customer as
sender which is not authorized and not effective as the order of the customer under
section 41-04.1-10 or is not enforceable, in whole or in part, against the customer
under section 41-04.1-11, 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 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 ninety 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 because of a failure by the customer to give
notification as stated in this section.
2. Reasonable time under subsection 1 may be fixed by agreement under subsection 1
of section 41-01-16, but the obligation of a receiving bank to refund payment as stated
in subsection 1 may not otherwise be varied by agreement.

### § 41-04.1-13. (4A-205) Erroneous payment orders.

1. If an accepted payment order was transmitted pursuant to a security procedure for the
detection of error and the payment order erroneously instructed payment to a
beneficiary not intended by the sender, erroneously instructed payment in an amount
greater than the amount intended by the sender, or was an erroneously transmitted
duplicate of a payment order previously sent by the sender, the following rules apply:
a. If the sender proves that the sender or a person acting on behalf of the sender
pursuant to section 41-04.1-14 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 subdivisions b and c.
b. If the funds transfer is completed on the basis of an erroneous payment order,
other than an erroneously transmitted duplicate of a payment order, 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.
c. If the funds transfer is completed on the basis of a payment order erroneously
instructing payment in an amount greater than intended by the sender, the sender
is not obliged to pay the order to the extent the amount received by the
beneficiary is greater than the amount intended by the sender. In that case, the
receiving bank is entitled to recover from the beneficiary the excess amount
received to the extent allowed by the law governing mistake and restitution.
2. If the sender of an erroneous payment order described in subsection 1 is not obliged
to pay all or part of the order and if the sender receives notification from the receiving
bank that the order was accepted by the bank or that the sender's account was
debited with respect to the order, the sender has a duty to exercise ordinary care, on
the basis of information available to the sender, to discover the error with respect to
the order and to advise the bank of the relevant facts within a reasonable time, not
exceeding ninety days, after the bank's notification was received by the sender. If the
bank proves that the sender failed to perform that duty, the sender is liable to the bank
for the loss the bank proves it incurred as a result of the failure, but the liability of the
sender may not exceed the amount of the sender's order.
3. This section applies to amendments to payment orders to the same extent it applies to
payment orders.
### § 41-04.1-14. (4A-206) Transmission of payment order through funds-transfer or other

communication system.
1. If a payment order addressed to a receiving bank is transmitted to a funds-transfer
system or other third-party communication system for transmittal to the bank, the
system is deemed to be an agent of the sender for the purpose of transmitting the
payment order to the bank. If there is a discrepancy between the terms of the payment
order transmitted to the system and the terms of the payment order transmitted by the
system to the bank, the terms of the payment order of the sender are those
transmitted by the system. This section does not apply to a funds-transfer system of
the federal reserve banks.
2. This section applies to cancellations and amendments of payment orders to the same
extent it applies to payment orders.
### § 41-04.1-15. (4A-207) Misdescription of beneficiary.

1. Subject to subsection 2, 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.
2. 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:

a. Except as otherwise provided in subsection 3, if the beneficiary's bank does not
know that the name and number refer to different persons, 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.
b. If the beneficiary's bank pays the person identified by name or 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.
3. If a payment order described in subsection 2 is accepted, the originator's payment
order described the beneficiary inconsistently by name and number, and the
beneficiary's bank pays the person identified by number as permitted by subdivision a
of subsection 2, the following rules apply:
a. If the originator is a bank, the originator is obliged to pay its order.
b. If the originator is not a bank and proves that the person identified by number was
not entitled to receive payment from the originator, the originator is not obliged to
pay its order unless the originator's bank proves that the originator, before
acceptance of the originator's order, had notice that payment of a payment order
issued by the originator might be made by the beneficiary's bank on the basis of
an identifying or bank account number even if it identifies a person different from
the named beneficiary. Proof of notice may be made by any admissible evidence.
The originator's bank satisfied the burden of proof if it proves that the originator,
before the payment order was accepted, signed a record stating the information
to which the notice relates.
4. In a case governed by subdivision a of subsection 2, if the beneficiary's bank rightfully
pays the person identified by number and that person was not entitled to receive
payment from the originator, the amount paid may be recovered from that person to
the extent allowed by the law governing mistake and restitution as follows:
a. If the originator is obliged to pay its payment order as stated in subsection 3, the
originator has the right to recover.
b. If the originator is not a bank and is not obliged to pay its payment order, the
originator's bank has the right to recover.
### § 41-04.1-16. (4A-208) Misdescription of intermediary bank or beneficiary's bank.

1. This subsection applies to a payment order identifying an intermediary bank or the
beneficiary's bank only by an identifying number.
a. The receiving bank may rely on the number as the proper identification of the
intermediary or beneficiary's bank and need not determine whether the number
identifies a bank.
b. The sender is obliged to compensate the receiving bank for any loss and
expenses incurred by the receiving bank as a result of its reliance on the number
in execution or attempting to execute the order.
2. This subsection applies to a payment order identifying an intermediary bank or the
beneficiary's bank both by name and an identifying number if the name and number
identify different persons.
a. If a sender is a bank, the receiving bank may rely on the number as the proper
identification of the intermediary or beneficiary's bank if the receiving bank, when
it executes the sender's order, does not know that the name and number identify
different persons. The receiving bank need not determine whether the name and
number refer to the same person or whether the number refers to a bank. The
sender is obliged to compensate the receiving bank for any loss and expenses
incurred by the receiving bank as a result of its reliance on the number in
executing or attempting to execute the order.
b. If the sender is not a bank and the receiving bank proves that the sender, before
the payment order was accepted, had notice that the receiving bank might rely on

the number as the proper identification of the intermediary or beneficiary's bank
even if it identifies a person different from the bank identified by name, the rights
and obligations of the sender and the receiving bank are governed by
subdivision a of subsection 2, as though the sender were a bank. Proof of notice
may be made by any admissible evidence. The receiving bank satisfies the
burden of proof if it proves that the sender, before the payment order was
accepted, signed a record stating the information to which the notice relates.
c. Regardless of whether the sender is a bank, the receiving bank may rely on the
name as the proper identification of the intermediary or beneficiary's bank if the
receiving bank, at the time it executes the sender's order, does not know that the
name and number identify different persons. The receiving bank need not
determine whether the name and number refer to the same person.
d. If the receiving bank knows that the name and number identify different persons,
reliance on either the name or the number in executing the sender's payment
order is a breach of the obligation stated in subdivision a of subsection 1 of
section 41-04.1-22.
### § 41-04.1-17. (4A-209) Acceptance of payment order.

1. Subject to subsection 4, a receiving bank other than the beneficiary's bank accepts a
payment order when it executes the order.
2. Subject to subsections 3 and 4, a beneficiary's bank accepts a payment order at the
earliest of the following times:
a. When the bank pays the beneficiary as stated in subsection 1 or 2 of section
the beneficiary has been credited with respect to the order unless the notice
indicates that the bank is rejecting the order or that funds with respect to the
order may not be withdrawn or used until receipt of payment from the sender of
the order.
b. When the bank receives payment of the entire amount of the sender's order
under subdivision a or b of subsection 1 of section 41-04.1-28.
c. The opening of the next funds-transfer business day of the bank following the
payment date of the order if, at that time, the amount of the sender's order is fully
covered by a withdrawable credit balance in an authorized account of the sender
or the bank has otherwise received full payment from the sender, unless the order
was rejected before that time or is rejected within one hour after that time or one
hour after the opening of the next business day of the sender following the
payment date if that time is later. If notice of rejection is received by the sender
after the payment 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 payment date to the day the
sender receives notice or learns that the order was not accepted, counting that
day as an elapsed day. If the withdrawable credit balance during that period falls
below the amount of the order, the amount of interest payable is reduced
accordingly.
3. Acceptance of a payment order cannot occur before the order is received by the
receiving bank. Acceptance does not occur under subdivision b or c of subsection 2 if
the beneficiary of the payment order does not have an account with the receiving
bank, the account has been closed, or the receiving bank is not permitted by law to
receive credits for the beneficiary's account.
4. A payment order issued to the originator's bank cannot be accepted until the payment
date if the bank is the beneficiary's bank or the execution date if the bank is not the
beneficiary's bank. If the originator's bank executes the originator's payment order
before the execution date or pays the beneficiary of the originator's payment order
before the payment date and the payment order is subsequently canceled under
subsection 2 of section 41-04.1-19, the bank may recover from the beneficiary any
payment received to the extent allowed by the law governing mistake and restitution.

### § 41-04.1-18. (4A-210) Rejection of payment order.

1. A payment order is rejected by the receiving bank by a notice of rejection transmitted
to the sender orally or in a record. 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, any means complying with the agreement
is reasonable, and any means not complying is not reasonable unless no significant
delay in receipt of the notice resulted from the use of the noncomplying means.
2. 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 to 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
under subsection 4 of section 41-04.1-19 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.
3. If a receiving bank suspends payments, all unaccepted payment orders issued to it are
deemed rejected at the time the bank suspends payments.
4. Acceptance of a payment order precludes a later rejection of the order. Rejection of a
payment order precludes a later acceptance of the order.
### § 41-04.1-19. (4A-211) Cancellation and amendment of payment order.

1. A communication of the sender of a payment order canceling or amending the order
may be transmitted to the receiving bank orally or in a record. If a security procedure is
in effect between the sender and the receiving bank, the communication is not
effective to cancel or amend the order unless the communication is verified pursuant to
the security procedure or the bank agrees to the cancellation or amendment.
2. Subject to subsection 1, a communication by the sender canceling or amending a
payment order is effective to cancel or amend the order if notice of the communication
is received at a time and in a manner affording the receiving bank a reasonable
opportunity to act on the communication before the bank accepts the payment order.
3. After a payment order has been accepted, cancellation or amendment of the order is
not effective unless the receiving bank agrees or a funds-transfer system rule allows
cancellation or amendment without agreement of the bank.
a. With respect to a payment order accepted by a receiving bank other than the
beneficiary's bank, cancellation or amendment is not effective unless a
conforming cancellation or amendment of the payment order issued by the
receiving bank is also made.
b. With respect to a payment order accepted by the beneficiary's bank, cancellation
or amendment is not effective unless the order was issued in execution of an
unauthorized payment order, or because of a mistake by a sender in the funds
transfer which resulted in the issuance of a payment order that is a duplicate of a
payment order previously issued by the sender, that orders payment to a
beneficiary not entitled to receive payment from the originator, or that orders
payment in an amount greater than the amount the beneficiary was entitled to
receive from the originator. If the payment order is canceled or amended, the
beneficiary's 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.

4. An unaccepted payment order is canceled by operation of law at the close of the fifth
funds-transfer business day of the receiving bank after the execution date or payment
date of the order.
5. A canceled payment order cannot be accepted. If an accepted payment order is
canceled, the acceptance is nullified and no person has any right or obligation based
on the acceptance. Amendment of a payment order is deemed to be cancellation of
the original order at the time of amendment and issuance of a new payment order in
the amended form at the same time.
6. Unless otherwise provided in an agreement of the parties or in a funds-transfer system
rule, if the receiving bank, after accepting a payment order, agrees to cancellation or
amendment of the order by the sender or is bound by a funds-transfer system rule
allowing cancellation or amendment without the bank's agreement, the sender,
whether or not cancellation or amendment is effective, is liable to the bank for any loss
and expenses, including reasonable attorney's fees, incurred by the bank as a result of
the cancellation or amendment or attempted cancellation or amendment.
7. A payment order is not revoked by the death or legal incapacity of the sender unless
the receiving bank knows of the death or of an adjudication of incapacity by a court of
competent jurisdiction and has reasonable opportunity to act before acceptance of the
order.
8. A funds-transfer system rule is not effective to the extent it conflicts with subdivision b
of subsection 3.
### § 41-04.1-20. (4A-212) Liability and duty of receiving bank regarding unaccepted

payment order.
If a receiving bank fails to accept a payment order that it is obliged by express agreement to
accept, the bank is liable for breach of the agreement to the extent provided in the agreement or
in this chapter, but does not otherwise have any duty to accept a payment order or, before
acceptance, to take any action or refrain from taking action with respect to the order except as
provided in this chapter or by express agreement. Liability based on acceptance arises only
when acceptance occurs as stated in section 41-04.1-17, and liability is limited to that provided
in this chapter. A receiving bank is not the agent of the sender or beneficiary of the payment
order it accepts or of any other party to the funds transfer, and the bank owes no duty to any
party to the funds transfer except as provided in this chapter or by express agreement.
### § 41-04.1-21. (4A-301) Execution and execution date.

1. A payment order is "executed" by the receiving bank when it issues a payment order
intended to carry out the payment order received by the bank. A payment order
received by the beneficiary's bank may be accepted but may not be executed.
2. "Execution date" of a payment order means the day on which the receiving bank may
properly issue a payment-order execution of the sender's order. The execution date
may be determined by instruction of the sender but cannot be earlier than the day the
order is received and, unless otherwise determined, is the day the order is received. If
the sender's instruction states a payment date, the execution date is the payment date
or an earlier date on which execution is reasonably necessary to allow payment to the
beneficiary on the payment date.
### § 41-04.1-22. (4A-302) Obligations of receiving bank in execution of payment order.

1. Except as provided in subsections 2 through 4, if the receiving bank accepts a
payment order under subsection 1 of section 41-04.1-17, the bank has the following
obligations in executing the order:
a. 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 any intermediary bank or funds-transfer system to be used in carrying
out the funds transfer or 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.
b. 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.
2. Unless otherwise instructed, a receiving bank executing a payment order may use any
funds-transfer system if use of that system is reasonable in the circumstances and
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.
3. Unless subdivision b of subsection 1 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.
4. Unless instructed by the sender, 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 may not instruct a subsequent receiving
bank to obtain payment of its charges in the same manner.
### § 41-04.1-23. (4A-303) Erroneous execution of payment order.

1. A receiving bank that executes the payment order of the sender by issuing a payment
order in an amount greater than the amount of the sender's order or issues a payment
order in execution of the sender's order and then issues a duplicate order is entitled to
payment of the amount of the sender's order under subsection 3 of section 41-04.1-27
if that subsection is otherwise satisfied. The bank is entitled to recover from the
beneficiary of the erroneous order the excess payment received to the extent allowed
by the law governing mistake and restitution.
2. A receiving bank that executes the payment order of the sender by issuing a payment
order in an amount less than the amount of the sender's order is entitled to payment of
the amount of the sender's order under subsection 3 of section 41-04.1-27 if that
subsection is otherwise satisfied and the bank corrects its mistake by issuing an
additional payment order for the benefit of the beneficiary of the sender's order. If the
error is not corrected, the issuer of the erroneous order is entitled to receive or retain
payment from the sender of the order it accepted only to the extent of the amount of
the erroneous order. This subsection does not apply if the receiving bank executes the
sender's payment order by issuing a payment order in an amount less than the amount
of the sender's order for the purpose of obtaining payment of its charges for services
and expenses pursuant to instruction of the sender.
3. If a receiving bank executes the payment order of the sender by issuing a payment
order to a beneficiary different from the beneficiary of the sender's order and the funds
transfer is completed on the basis of that error, the sender of the payment order that

was erroneously executed and all previous senders in the funds transfer are not
obliged to pay the payment orders they issued. The issuer of the erroneous order is
entitled to recover from the beneficiary of the order the payment received to the extent
allowed by the law governing mistake and restitution.
### § 41-04.1-24. (4A-304) Duty of sender to report erroneously executed payment order.

If the sender of a payment order that is erroneously executed as stated in section
sender's account was debited with respect to the order, the sender has a duty to exercise
ordinary care to determine, on the basis of information available to the sender, that the order
was erroneously executed and to notify the bank of the relevant facts within a reasonable time
not exceeding ninety days after the notification from the bank was received by the sender. If the
sender fails to perform that duty, the bank is not obliged to pay interest on any amount
refundable to the sender under subsection 4 of section 41-04.1-27 for the period before the
bank learns of the execution error. The bank is not entitled to any recovery from the sender on
account of a failure by the sender to perform the duty stated in this section.
### § 41-04.1-25. (4A-305) Liability for late or improper execution or failure to execute

payment order.
1. If a funds transfer is completed but execution of a payment order by the receiving bank
in breach of section 41-04.1-22 results in delay in payment to the beneficiary, the bank
is obliged to pay interest to either the originator or the beneficiary of the funds transfer
for the period of delay caused by the improper execution. Except as provided in
subsection 3, additional damages are not recoverable.
2. If execution of a payment order by a receiving bank in breach of section 41-04.1-22
results in noncompletion of the funds transfer, failure to use an intermediary bank
designated by the originator, or issuance of a payment order that does not comply with
the terms of the payment order of the originator, the bank is liable to the originator for
its expenses in the funds transfer and for incidental expenses and interest losses, to
the extent not covered by subsection 1, resulting from the improper execution. Except
as provided in subsection 3, additional damages are not recoverable.
3. In addition to the amounts payable under subsections 1 and 2, damages, including
consequential damages, are recoverable to the extent provided in an express
agreement of the receiving bank, evidenced by a record.
4. If a receiving bank fails to execute a payment order it was obliged by express
agreement to execute, the receiving bank is liable to the sender for its expenses in the
transaction and for incidental expenses and interest losses resulting from the failure to
execute. Additional damages, including consequential damages, are recoverable to
the extent provided in an express agreement of the receiving bank, evidenced by a
record, but are not otherwise recoverable.
5. Reasonable attorney's fees are recoverable if demand for compensation under
subsection 1 or 2 is made and refused before an action is brought on the claim. If a
claim is made for breach of an agreement under subsection 4 and the agreement does
not provide for damages, reasonable attorney's fees are recoverable if demand for
compensation under subsection 4 is made and refused before an action is brought on
the claim.
6. Except as stated in this section, the liability of a receiving bank under subsections 1
and 2 may not be varied by agreement.
### § 41-04.1-26. (4A-401) Payment date.

"Payment date" of a payment order means the day on which the amount of the order is
payable to the beneficiary by the beneficiary's bank. The payment date may be determined by
instruction of the sender but cannot be earlier than the day the order is received by the
beneficiary's bank and, unless otherwise determined, is the day the order is received by the
beneficiary's bank.

### § 41-04.1-27. (4A-402) Obligation of sender to pay receiving bank.

1. This section is subject to sections 41-04.1-13 and 41-04.1-15.
2. With respect to a payment order issued to the beneficiary's bank, acceptance of the
order by the bank obliges the sender to pay the bank the amount of the order, but
payment is not due until the payment date of the order.
3. This subsection is subject to subsection 5 and to section 41-04.1-23. With respect to a
payment order issued to a receiving bank other than the beneficiary's bank,
acceptance of the order by the receiving bank obliges the sender to pay the bank the
amount of the sender's order. Payment by the sender is not due until the execution
date of the sender's order. The obligation of that sender to pay its payment order is
excused if the funds transfer is not completed by acceptance by the beneficiary's bank
of a payment order instructing payment to the beneficiary of that sender's payment
order.
4. If the sender of a payment order pays the order and was not obliged to pay all or part
of the amount paid, the bank receiving payment is obliged to refund payment to the
extent the sender was not obliged to pay. Except as provided in sections 41-04.1-12
and 41-04.1-24, interest is payable on the refundable amount from the date of
payment.
5. If a funds transfer is not completed as stated in subsection 3 and an intermediary bank
is obliged to refund payment as stated in subsection 4 but is unable to do so because
not permitted by applicable law or because the bank suspends payments, a sender in
the funds transfer that executed a payment order in compliance with an instruction, as
stated in subdivision a of subsection 1 of section 41-04.1-22, to route the funds
transfer through that intermediary bank is entitled to receive or retain payment from the
sender of the payment order that it accepted. The first sender in the funds transfer that
issued an instruction requiring routing through that intermediary bank is subrogated to
the right of the bank that paid the intermediary bank to refund as stated in
subsection 4.
6. The right of the sender of a payment order to be excused from the obligation to pay
the order as stated in subsection 3 or to receive refund under subsection 4 may not be
varied by agreement.
### § 41-04.1-28. (4A-403) Payment by sender to receiving bank.

1. Payment of the sender's obligation under section 41-04.1-27 to pay the receiving bank
occurs as follows:
a. If the sender is a bank, payment occurs when the receiving bank receives final
settlement of the obligation through a federal reserve bank or through a
funds-transfer system.
b. If the sender is a bank and the sender credited an account of the receiving bank
with the sender or caused an account of the receiving bank in another bank to be
credited, payment occurs when the credit is withdrawn or, if not withdrawn, at
midnight of the day on which the credit is withdrawable and the receiving bank
learns of that fact.
c. If the receiving bank debits an account of the sender with the receiving bank,
payment occurs when the debit is made to the extent the debit is covered by a
withdrawable credit balance in the account.
2. If the sender and receiving bank are members of a funds-transfer system that nets
obligations multilaterally among participants, the receiving bank receives final
settlement when settlement is complete in accordance with the rules of the system.
The obligation of the sender to pay the amount of a payment order transmitted through
the funds-transfer system may be satisfied, to the extent permitted by the rules of the
system, by setting off and applying against the sender's obligation the right of the
sender to receive payment from the receiving bank of the amount of any other
payment order transmitted to the sender by the receiving bank through the
funds-transfer system. The aggregate balance of obligations owed by each sender to
each receiving bank in the funds-transfer system may be satisfied, to the extent

permitted by the rules of the system, by setting off and applying against that balance
the aggregate balance of obligations owed to the sender by other members of the
system. The aggregate balance is determined after the right of setoff stated in the
second sentence of this subsection has been exercised.
3. If two banks transmit payment orders to each other under an agreement that
settlement of the obligations of each bank to the other under section 41-04.1-27 will be
made at the end of the day or other period, the total amount owed with respect to all
orders transmitted by one bank shall be set off against the total amount owed with
respect to all orders transmitted by the other bank. To the extent of the setoff, each
bank has made payment to the other.
4. In a case not covered by subsection 1, the time when payment of the sender's
obligation under subsection 2 or 3 of section 41-04.1-27 occurs is governed by
applicable principles of law that determine when an obligation is satisfied.
### § 41-04.1-29. (4A-404) Obligation of beneficiary's bank to pay and give notice to

beneficiary.
1. Subject to subsection 5 of section 41-04.1-19 and subsections 4 and 5 of section
41-04.1-30, if a beneficiary's bank accepts a payment order, the bank is obliged to pay
the amount of the order to the beneficiary of the order. Payment is due on the payment
date of the order, but if acceptance occurs on the payment date after the close of the
funds-transfer business day of the bank, payment is due on the next funds-transfer
business day. If the bank refuses to pay after demand by the beneficiary and receipt of
notice of particular circumstances that will give rise to consequential damages as a
result of nonpayment, the beneficiary may recover damages resulting from the refusal
to pay to the extent the bank had notice of the damages, unless the bank proves that it
did not pay because of a reasonable doubt concerning the right of the beneficiary to
payment.
2. If a payment order accepted by the beneficiary's bank instructs payment to an account
of the beneficiary, the bank is obliged to notify the beneficiary of receipt of the order
before midnight of the next funds-transfer business day following the payment date. If
the payment order does not instruct payment to an account of the beneficiary, the bank
is required to notify the beneficiary only if notice is required by the order. Notice may
be given by first-class mail or any other means reasonable in the circumstances. If the
bank fails to give the required notice, the bank is obliged to pay interest to the
beneficiary on the amount of the payment order from the day notice should have been
given until the day the beneficiary learned of receipt of the payment order by the bank.
No other damages are recoverable. Reasonable attorney's fees are also recoverable if
demand for interest is made and refused before an action is brought on the claim.
3. The right of a beneficiary to receive payment and damages as stated in subsection 1
may not be varied by agreement or a funds-transfer system rule. The right of a
beneficiary to be notified as stated in subsection 2 may be varied by agreement of the
beneficiary or by a funds-transfer system rule if the beneficiary is notified of the rule
before initiation of the funds transfer.
### § 41-04.1-30. (4A-405) Payment by beneficiary's bank to beneficiary.

1. If the beneficiary's bank credits an account of the beneficiary of a payment order,
payment of the bank's obligation under subsection 1 of section 41-04.1-29 occurs
when and to the extent the beneficiary is notified of the right to withdraw the credit, the
bank lawfully applies the credit to a debt of the beneficiary, or funds with respect to the
order are otherwise made available to the beneficiary by the bank.
2. If the beneficiary's bank does not credit an account of the beneficiary of a payment
order, the time when payment of the bank's obligation under subsection 1 of section
is satisfied.
3. Except as stated in subsections 4 and 5, if the beneficiary's bank pays the beneficiary
of a payment order under a condition to payment or agreement of the beneficiary

giving the bank the right to recover payment from the beneficiary if the bank does not
receive payment of the order, the condition to payment or agreement is not
enforceable.
4. A funds-transfer system rule may provide that payments made to beneficiaries of funds
transfers made through the system are provisional until receipt of payment by the
beneficiary's bank of the payment order it accepted. A beneficiary's bank that makes a
payment that is provisional under the rule is entitled to refund from the beneficiary if
the rule requires that both the beneficiary and the originator be given notice of the
provisional nature of the payment before the funds transfer is initiated, the beneficiary,
the beneficiary's bank and the originator's bank agreed to be bound by the rule, and
the beneficiary's bank did not receive payment of the payment order that it accepted. If
the beneficiary is obliged to refund payment to the beneficiary's bank, acceptance of
the payment order by the beneficiary's bank is nullified and no payment by the
originator of the funds transfer to the beneficiary occurs under section 41-04.1-31.
5. This subsection applies to a funds transfer that includes a payment order transmitted
over a funds-transfer system that nets obligations multilaterally among participants and
has in effect a loss-sharing agreement among participants for the purpose of providing
funds necessary to complete settlement of the obligations of one or more participants
that do not meet their settlement obligations. If the beneficiary's bank in the funds
transfer accepts a payment order and the system fails to complete settlement under its
rules with respect to any payment order in the funds transfer, the acceptance by the
beneficiary's bank is nullified and no person has any right or obligation based on the
acceptance; the beneficiary's bank is entitled to recover payment from the beneficiary;
no payment by the originator to the beneficiary occurs under section 41-04.1-31; and
subject to subsection 5 of section 41-04.1-27, each sender in the funds transfer is
excused from its obligation to pay its payment order under subsection 3 of section
### § 41-04.1-31. (4A-406) Payment by originator to beneficiary - Discharge of underlying

obligation.
1. Subject to subsection 5 of section 41-04.1-19 and to subsections 4 and 5 of section
41-04.1-30, the originator of a funds transfer pays the beneficiary of the originator's
payment order at the time a payment order for the benefit of the beneficiary is
accepted by the beneficiary's bank in the funds transfer and in an amount equal to the
amount of the order accepted by the beneficiary's bank, but not more than the amount
of the originator's order.
2. If payment under subsection 1 is made to satisfy an obligation, the obligation is
discharged to the same extent discharge would result from payment to the beneficiary
of the same amount in money, unless the payment under subsection 1 was made by a
means prohibited by the contract of the beneficiary with respect to the obligation; the
beneficiary, within a reasonable time after receiving notice of receipt of the order by the
beneficiary's bank, notified the originator of the beneficiary's refusal of the payment;
funds with respect to the order were not withdrawn by the beneficiary or applied to a
debt of the beneficiary; and the beneficiary would suffer a loss that could reasonably
have been avoided if payment had been made by a means complying with the
contract. If payment by the originator does not result in discharge under this section,
the originator is subrogated to the rights of the beneficiary to receive payment from the
beneficiary's bank under subsection 1 of section 41-04.1-29.
3. For the purpose of determining whether discharge of an obligation occurs under
subsection 2, if the beneficiary's bank accepts a payment order in an amount equal to
the amount of the originator's payment order less charges of one or more receiving
banks in the funds transfer, payment to the beneficiary is deemed to be in the amount
of the originator's order unless upon demand by the beneficiary the originator does not
pay the beneficiary the amount of the deducted charges.
4. Rights of the originator or of the beneficiary of a funds transfer under this section may
be varied only by agreement of the originator and the beneficiary.

### § 41-04.1-32. (4A-501) Variation by agreement and effect of funds-transfer system rule.

1. Except as otherwise provided in this chapter, the rights and obligations of a party to a
funds transfer may be varied by agreement of the affected party.
2. "Funds-transfer system rule" means a rule of an association of banks:
a. Which governs transmission of payment orders by means of a funds-transfer
system of the association or rights and obligations with respect to those orders; or
b. To the extent the rule governs rights and obligations between banks that are
parties to a funds transfer in which a federal reserve bank, acting as an
intermediary bank, sends a payment order to the beneficiary's bank.
Except as otherwise provided in this chapter, a funds-transfer system rule governing
rights and obligations between participating banks using the system may be effective
even if the rule conflicts with this chapter and indirectly affects another party to the
funds transfer who does not consent to the rule. A funds-transfer system rule may also
govern rights and obligations of parties other than participating banks using the system
to the extent stated in subsection 3 of section 41-04.1-29, subsection 4 of section
41-04.1-30, and subsection 3 of section 41-04.1-38.
### § 41-04.1-33. (4A-502) Creditor process served on receiving bank - Setoff by

beneficiary's bank.
1. As used in this section, "creditor process" means levy, attachment, garnishment, notice
of lien, sequestration, or similar process issued by or on behalf of a creditor or other
claimant with respect to an account.
2. This subsection applies to a creditor process with respect to an authorized account of
the sender of a payment order if the creditor process is served on the receiving bank.
For the purpose of determining rights with respect to the creditor process, if the
receiving bank accepts the payment order the balance in the authorized account is
deemed to be reduced by the amount of the payment order to the extent the bank did
not otherwise receive payment of the order, unless the creditor process is served at a
time and in a manner affording the bank a reasonable opportunity to act on it before
the bank accepts the payment order.
3. If a beneficiary's bank has received a payment order for payment to the beneficiary's
account in the bank, the following rules apply:
a. The bank may credit the beneficiary's account. The amount credited may be set
off against an obligation owed by the beneficiary to the bank or may be applied to
satisfy creditor process served on the bank with respect to the account.
b. The bank may credit the beneficiary's account and allow withdrawal of the
amount credited unless creditor process with respect to the account is served at a
time and in a manner affording the bank a reasonable opportunity to act to
prevent withdrawal.
c. If creditor process with respect to the beneficiary's account has been served and
the bank has had a reasonable opportunity to act on it, the bank may not reject
the payment order except for a reason unrelated to the service of process.
4. Creditor process with respect to a payment by the originator to the beneficiary
pursuant to a funds transfer may be served only on the beneficiary's bank with respect
to the debt owed by that bank to the beneficiary. Any other bank served with the
creditor process is not obliged to act with respect to the process.
### § 41-04.1-34. (4A-503) Injunction or restraining order with respect to funds transfer.

For proper cause and under applicable law, a court may restrain a person from issuing a
payment order to initiate a funds transfer, an originator's bank from executing the payment order
of the originator, the beneficiary's bank from releasing funds to the beneficiary, or the beneficiary
from withdrawing the funds. A court may not otherwise restrain a person from issuing a payment
order, paying or receiving payment of a payment order, or otherwise acting with respect to a
funds transfer.

### § 41-04.1-35. (4A-504) Order in which items and payment orders may be charged to

account - Order withdrawal from account.
1. If a receiving bank has received more than one payment order of the sender or one or
more payment orders and other items that are payable from the sender's account, the
bank may charge the sender's account with respect to the various orders and items in
any sequence.
2. In determining whether a credit to an account has been withdrawn by the holder of the
account or applied to a debt of the holder of the account, credits first made to the
account are first withdrawn or applied.
### § 41-04.1-36. (4A-505) Preclusion of objection to debit of customer's account.

If a receiving bank has received payment from its customer with respect to a payment order
issued in the name of the customer as sender and accepted by the bank, and the customer
received notification reasonably identifying the order, the customer is precluded from asserting
that the bank is not entitled to retain the payment unless the customer notifies the bank of the
customer's objection to the payment within one year after the notification was received by the
customer.
### § 41-04.1-37. (4A-506) Rate of interest.

1. If, under this chapter, a receiving bank is obliged to pay interest with respect to a
payment order issued to the bank, the amount payable may be determined by
agreement of the sender and receiving bank or by a funds-transfer system rule if the
payment order is transmitted through a funds-transfer system.
2. If the amount of interest is not determined by an agreement or rule as stated in
subsection 1, the amount is calculated by multiplying the applicable federal funds rate
by the amount on which interest is payable, and then multiplying the product by the
number of days for which interest is payable. The applicable federal funds rate is the
average of the federal funds rates published by the federal reserve bank of New York
for each of the days for which interest is payable divided by three hundred sixty. The
federal funds rate for any day on which a published rate is not available is the same as
the published rate for the next preceding day for which there is a published rate. If a
receiving bank that accepted a payment order is required to refund payment to the
sender of the order because the funds transfer was not completed, but the failure to
complete was not due to any fault by the bank, the interest payable is reduced by a
percentage equal to the reserve requirement on deposits of the receiving bank.
### § 41-04.1-38. (4A-507) Choice of law.

1. The following rules apply unless the affected parties otherwise agree or subsection 3
applies:
a. The rights and obligations between the sender of a payment order and the
receiving bank are governed by the law of the jurisdiction in which the receiving
bank is located.
b. The rights and obligations between the beneficiary's bank and the beneficiary are
governed by the law of the jurisdiction in which the beneficiary's bank is located.
c. The issue of when payment is made pursuant to a funds transfer by the originator
to the beneficiary is governed by the law of the jurisdiction in which the
beneficiary's bank is located.
2. If the parties described in each subdivision of subsection 1 have made an agreement
selecting the law of a particular jurisdiction to govern rights and obligations between
each other, the law of that jurisdiction governs those rights and obligations, whether or
not the payment order or the funds transfer bears a reasonable relation to that
jurisdiction.
3. A funds-transfer system rule may select the law of a particular jurisdiction to govern
the:

a. Rights and obligations between participating banks with respect to payment
orders transmitted or processed through the system.
b. The rights and obligations of some or all parties to a funds transfer any part of
which is carried out by means of the system.
A choice of law made under subdivision a is binding on participating banks. A choice of
law made under subdivision b is binding on the originator, other sender, or a receiving
bank having notice that the funds-transfer system might be used in the funds transfer
and of the choice of law by the system when the originator, other sender, or receiving
bank issued or accepted a payment order. The beneficiary of a funds transfer is bound
by the choice of law if, when the funds transfer is initiated, the beneficiary has notice
that the funds-transfer system might be used in the funds transfer and of the choice of
law by the system. The law of a jurisdiction selected pursuant to this subsection may
govern, whether or not that law bears a reasonable relation to the matter in issue.
4. In the event of inconsistency between an agreement under subsection 2 and a
choice-of-law rule under subsection 3, the agreement under subsection 2 prevails.
5. If a funds transfer is made by use of more than one funds-transfer system and there is
inconsistency between choice-of-law rules of the systems, the matter in issue is
governed by the law of the selected jurisdiction that has the most significant
relationship to the matter in issue.
