Section 4-A-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 (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:

(a) If the sender proves that the sender or a person acting on

behalf of the sender pursuant to Section 4-A-206 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 (b) and (c).

(b) If the funds transfer is completed on the basis of an

erroneous payment order described in clause (i) or (iii) of

subsection (1), 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 described in clause (ii) of subsection (1), 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 (i) the sender of an erroneous payment order described in
subsection (1) is not obliged to pay all or part of the order, and (ii)
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.