KRS 355.4A-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:

1. Pays the beneficiary as stated in KRS 355.4A-405(1) or (2); or

2. Notifies the beneficiary of receipt of the order or that the account of 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the order may not be withdrawn or used until receipt of payment from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

pursuant to KRS 355.4A-403(1)(a) or (b); or

(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;

1. One hour after that time; or

2. 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 fo r 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 subsection (2)(b) or (2)(c) 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 pursuant to KRS 355.4A -211(2), the bank may recover from the

beneficiary any payment received to the extent allowed by the law governing

mistake and restitution.