KRS 355.4A-402: Obligation of sender to pay receiving bank.

(1) This section is subject to KRS 355.4A-205 and 355.4A-207.

(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 KRS 355.4A -303. 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 send er 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 ob liged to refund payment to the

extent the sender was not obliged to pay. Except as provided in KRS 355.4A -204

and 355.4A -304, interest is payable on the refundable amount from the date of

payment.

(5) If a funds transfer is not completed as stated in subse ction (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 i n compliance with an

instruction, as stated in KRS 355.4A -302(1)(a), 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 tr ansfer 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 fr om the obligation to pay

the order as stated in subsection (3) or to receive refund under subsection (4) may

not be varied by agreement.