N.Y. Uniform Commercial Code Law § 4-a-303: Erroneous Execution of Payment Order

Section 4-A-303. Erroneous Execution of Payment Order.

(1) A receiving bank that (i) executes the payment order of the sender

by issuing a payment order in an amount greater than the amount of the

sender's order, or (ii) issues a payment order in execution of the

sender's order and then issues a duplicate order, is entitled to payment

of the amount of the sender's order under subsection (3) of Section

4-A-402 if that subsection is otherwise satisfied. The bank is entitled

to recover from the beneficiary of the erroneous order the excess

payment received to the extent allowed by the law governing mistake and

restitution.

(2) A receiving bank that executes the payment order of the sender by

issuing a payment order in an amount less than the amount of the

sender's order is entitled to payment of the amount of the sender's

order under subsection (3) of Section 4-A-402 if (i) that subsection is

otherwise satisfied and (ii) the bank corrects its mistake by issuing an

additional payment order for the benefit of the beneficiary of the

sender's order. If the error is not corrected, the issuer of the

erroneous order is entitled to receive or retain payment from the sender

of the order it accepted only to the extent of the amount of the

erroneous order. This subsection does not apply if the receiving bank

executes the sender's payment order by issuing a payment order in an

amount less than the amount of the sender's order for the purpose of

obtaining payment of its charges for services and expenses pursuant to

instruction of the sender.

(3) If a receiving bank executes the payment order of the sender by

issuing a payment order to a beneficiary different from the beneficiary

of the sender's order and the funds transfer is completed on the basis

of that error, the sender of the payment order that was erroneously

executed and all previous senders in the funds transfer are not obliged

to pay the payment orders they issued. The issuer of the erroneous order

is entitled to recover from the beneficiary of the order the payment

received to the extent allowed by the law governing mistake and

restitution.