{"data":{"id":"us-ky/krs-355.4a-205","jurisdiction":"us-ky","citation":"KRS 355.4A-205","heading":"Erroneous payment orders.","body":"(1) If an accepted payment order was transmitted pursuant to a security procedure for\nthe detection of error and the payment order:\n(a) Erroneously instructed payment to a beneficiary not intended by the sender;\n(b) Erroneously instructed payment in an amount greater than the amount\nintended by the sender; or\n(c) Was an erroneously transmitted duplicate of a payment order previously sent\nby the sender, the following rules apply:\n1. If the sender proves that the sender or a person acting on behalf of the\nsender pursuant to KRS 355.4A -206 complied with the security\nprocedure and that the error would have been detected if the receiving\nbank had also complied, the sender is not obliged to pay the order to the\nextent stated in paragraphs 2. and 3.\n2. If the funds tra nsfer is completed on the basis of an erroneous payment\norder described in clause (a) or (c) of subsection (1), the sender is not\nobliged to pay the order and the receiving bank is entitled to recover\nfrom the beneficiary any amount paid to the beneficiary  to the extent\nallowed by the law governing mistake and restitution.\n3. If the funds transfer is completed on the basis of a payment order\ndescribed in clause (b) of subsection (1), the sender is not obliged to pay\nthe order to the extent the amount receiv ed by the beneficiary is greater\nthan the amount intended by the sender. In that case, the receiving bank\nis entitled to recover from the beneficiary the excess amount received to\nthe extent allowed by the law governing mistake and restitution.\n(2) (a) If the sender of an erroneous payment order described in subsection (1) is not\nobliged to pay all or part of the order; and\n(b) The sender receives notification from the receiving bank that the order was\naccepted by the bank or that the sender's account was d ebited with respect to\nthe order, the sender has a duty to exercise ordinary care, on the basis of\ninformation available to the sender, to discover the error with respect to the\norder and to advise the bank of the relevant facts within a reasonable time, n ot\nexceeding ninety (90) days, after the bank's notification was received by the\nsender. If the bank proves that the sender failed to perform that duty, the\nsender is liable to the bank for the loss the bank proves it incurred as a result\nof the failure, but the liability of the sender may not exceed the amount of the\nsender's order.\n(3) This section applies to amendments to payment orders to the same extent it applies\nto payment orders.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33567","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:45Z","sha256":"698f4f42068e94d046575eb998a394d15565e358ed8febd60e06b0d106ebd992","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.4a-204","next":"us-ky/krs-355.4a-206"},"notice":"GroundRules: Original legal text. Not legal advice."}