N.Y. Uniform Commercial Code Law § 4-a-302: Obligations of Receiving Bank in Execution of Payment Order

Section 4-A-302. Obligations of Receiving Bank in Execution of Payment

Order.

(1) Except as provided in subsections (2) through (4); if the

receiving bank accepts a payment order pursuant to subsection (1) of

Section 4-A-209, the bank has the following obligations in executing the

order:

(a) The receiving bank is obliged to issue, on the execution

date, a payment order complying with the sender's order and

to follow the sender's instructions concerning (i) any

intermediary bank or funds-transfer system to be used in

carrying out the funds transfer, or (ii) the means by which

payment orders are to be transmitted in the funds transfer.

If the originator's bank issues a payment order to an

intermediary bank, the originator's bank is obliged to

instruct the intermediary bank according to the instruction

of the originator. An intermediary bank in the funds transfer

is similarly bound by an instruction given to it by the

sender of the payment order it accepts.

(b) If the sender's instruction states that the funds transfer is

to be carried out telephonically or by wire transfer or

otherwise indicates that the funds transfer is to be carried

out by the most expeditious means, the receiving bank is

obliged to transmit its payment order by the most expeditious

available means, and to instruct any intermediary bank

accordingly. If a sender's instruction states a payment date,

the receiving bank is obliged to transmit its payment order

at a time and by means reasonably necessary to allow payment

to the beneficiary on the payment date or as soon thereafter

as is feasible.

(2) Unless otherwise instructed, a receiving bank executing a payment

order may (i) use any funds-transfer system if use of that system is

reasonable in the circumstances, and (ii) issue a payment order to the

beneficiary's bank or to an intermediary bank through which a payment

order conforming to the sender's order can expeditiously be issued to

the beneficiary's bank if the receiving bank exercises ordinary care in

the selection of the intermediary bank. A receiving bank is not required

to follow an instruction of the sender designating a funds-transfer

system to be used in carrying out the funds transfer if the receiving

bank, in good faith, determines that it is not feasible to follow the

instruction or that following the instruction would unduly delay

completion of the funds transfer.

(3) Unless paragraph (b) of subsection (1) applies or the receiving

bank is otherwise instructed, the bank may execute a payment order by

transmitting its payment order by first class mail or by any means

reasonable in the circumstances. If the receiving bank is instructed to

execute the sender's order by transmitting its payment order by a

particular means, the receiving bank may issue its payment order by the

means stated or by any means as expeditious as the means stated.

(4) Unless instructed by the sender (i) the receiving bank may not

obtain payment of its charges for services and expenses in connection

with the execution of the sender's order by issuing a payment order in

an amount equal to the amount of the sender's order less the amount of

the charges, and (ii) may not instruct a subsequent receiving bank to

obtain payment of its charges in the same manner.