KRS 355.4A-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 KRS 355.4A -302 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) of this section, additional damages are not recoverable.

(2) If execution of a payment order by a receiving bank in breach of KRS 355.4A -302

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 co mply

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) of this section, resulting

from the improper execution. Except as provided in subsection (3) of this section,

additional damages are not recoverable.

(3) In addition to the amounts payable under subsections (1) and (2) of this section,

damages, including consequential damages, are r ecoverable 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) (a) Reasonable attorney's fees are recoverable if demand for compensation under

subsection (1) or (2) of this section is made and refused before an action is

brought on the claim.

(b) If a cla im is made for breach of an agreement under subsection (4) of this

section and the agreement does not provide for damages, reasonable attorney's

fees are recoverable if demand for compensation under subsection (4) of this

section 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) of this section may not be varied by agreement.