{"data":{"id":"us-ky/krs-355.4a-406","jurisdiction":"us-ky","citation":"KRS 355.4A-406","heading":"Payment by originator to beneficiary -- Discharge of underlying","body":"obligation.\n(1) Subject to KRS 355.4A -211(5), 355.4A-405(4), and 355.4A -405(5), the originator\nof a funds transfer pays the beneficiary of the originator's payment order:\n(a) At the ti me a payment order for the benefit of the beneficiary is accepted by\nthe beneficiary's bank in the funds transfer; and\n(b) In an amount equal to the amount of the order accepted by the beneficiary's\nbank, but not more than the amount of the originator's order.\n(2) If payment under subsection (1) is made to satisfy an obligation, the obligation is\ndischarged to the same extent discharge would result from payment to the\nbeneficiary of the same amount in money, unless:\n(a) The payment under subsection (1) was made by a means prohibited by the\ncontract of the beneficiary with respect to the obligation;\n(b) The beneficiary, within a reasonable time after receiving notice of receipt of\nthe order by the beneficiary's bank, notified the originator of the beneficiary 's\nrefusal of the payment;\n(c) Funds with respect to the order were not withdrawn by the beneficiary or\napplied to a debt of the beneficiary; and\n(d) The beneficiary would suffer a loss that could reasonably have been avoided if\npayment had been made by a means complying with the contract. If payment\nby the originator does not result in discharge under this section, the originator\nis subrogated to the rights of the beneficiary to receive payment from the\nbeneficiary's bank under KRS 355.4A-404(1).\n(3) For t he purpose of determining whether discharge of an obligation occurs under\nsubsection (2), if the beneficiary's bank accepts a payment order in an amount equal\nto the amount of the originator's payment order less charges of one (1) or more\nreceiving banks in the funds transfer, payment to the beneficiary is deemed to be in\nthe amount of the originator's order unless upon demand by the beneficiary the\noriginator does not pay the beneficiary the amount of the deducted charges.\n(4) Rights of the originator or o f the beneficiary of a funds transfer under this section\nmay be varied only by agreement of the originator and the beneficiary.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33585","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:45Z","sha256":"053a3807c8aba7153a9c492e0b2399fb01f0b41dbfa2ac76dd884817be379099","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.4a-405","next":"us-ky/krs-355.4a-501"},"notice":"GroundRules: Original legal text. Not legal advice."}