N.Y. Uniform Commercial Code Law § 4-a-402: Obligation of Sender to Pay Receiving Bank

Section 4-A-402. Obligation of Sender to Pay Receiving Bank.

(1) This section is subject to Sections 4-A-205 and 4-A-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 Section

4-A-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 sender 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 obliged to refund payment to the extent the sender was not

obliged to pay. Except as provided in Sections 4-A-204 and 4-A-304,

interest is payable on the refundable amount from the date of payment.

(5) If a funds transfer is not completed as stated in subsection (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 in compliance with an

instruction, as stated in paragraph (a) of subsection (1) of Section

4-A-302, 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 transfer 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 from the

obligation to pay the order as stated in subsection (3) or to receive

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