KRS 355.4A-211: Cancellation and amendment of payment order.

(1) (a) 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.

(b) If a security procedure is in effect between the sender and the receiving bank,

the communication is not ef fective 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) of this section, 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) (a) 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.

(b) 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.

(c) With respect to a pa yment 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:

1. That is a duplicate of a payment order previously issued by the sender;

2. That orders payment t o a beneficiary not entitled to receive payment

from the originator; or

3. 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) A canceled payment order cannot be accepted.

(b) If an accepted payment order is canceled, the acceptance is nullified and no

person has any right or obligation based on the acceptance.

(c) Amendment of a payment order is deemed to be cancellation of the original

order at the time of amendment and issue of a new payment order in the

amended form at the same time.

(6) Unless otherwise provided in an agreement o f 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

subsection (3)(c) of this section.