N.Y. Uniform Commercial Code Law § 4-a-305: Liability for Late or Improper Execution or Failure to Execute Payment Order

Section 4-A-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 Section 4-A-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), additional damages are not recoverable.

(2) If execution of a payment order by a receiving bank in breach of

Section 4-A-302 results in (i) noncompletion of the funds transfer, (ii)

failure to use an intermediary bank designated by the originator, or

(iii) issuance of a payment order that does not comply 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), resulting from the improper execution. Except as provided in

subsection (3), additional damages are not recoverable.

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

damages, including consequential damages, are recoverable 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) Reasonable attorney's fees are recoverable if demand for

compensation under subsection (1) or (2) is made and refused before an

action is brought on the claim. If a claim is made for breach of an

agreement under subsection (4) and the agreement does not provide for

damages, reasonable attorney's fees are recoverable if demand for

compensation under subsection (4) 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) may not be varied by agreement.