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(810 ILCS 5/Art.
4A Pt. 4 heading)
PART
4. PAYMENT
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(810 ILCS 5/4A-401) (from Ch. 26,
par. 4A-401)
Sec. 4A-401. Payment date. "Payment
date" of a payment order means the day on which the amount
of the order is payable to the beneficiary by the beneficiary's
bank. The payment date may be determined by instruction of
the sender but cannot be earlier than the day the order is
received by the beneficiary's bank and, unless otherwise determined,
is the day the order is received by the beneficiary's bank.
(Source: P.A. 86-1291.)
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(810 ILCS 5/4A-402) (from Ch. 26,
par. 4A-402)
Sec. 4A-402. Obligation of
sender to pay receiving bank.
(a) This Section is subject to
Sections 4A-205 and 4A-207.
(b) 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.
(c) This subsection is subject
to subsection (e) and to Section 4A-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.
(d) 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 4A-204 and 4A-304, interest
is payable on the refundable amount from the date of payment.
(e) If a funds transfer is not
completed as stated in subsection (c) and an intermediary bank
is obliged to refund payment as stated in subsection (d) 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 Section 4A-302(a)(1), 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 (d).
(f) The right of the sender of
a payment order to be excused from the obligation to pay the
order as stated in subsection (c) or to receive refund under
subsection (d) may not be varied by agreement.
(Source: P.A. 86-1291.)
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(810 ILCS 5/4A-403) (from Ch. 26,
par. 4A-403)
Sec. 4A-403. Payment by sender
to receiving bank.
(a) Payment of the sender's obligation
under Section 4A-402 to pay the receiving bank occurs as
follows:
(1) If
the sender is a bank, payment occurs when the
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receiving bank receives final settlement
of the obligation through a Federal Reserve Bank
or through a funds transfer system.
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(2)
If the sender is a bank and the sender (i)
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credited an account of the receiving
bank with the sender, or (ii) caused an account
of the receiving bank in another bank to be credited,
payment occurs when the credit is withdrawn or,
if not withdrawn, at midnight of the day on which
the credit is withdrawable and the receiving bank
learns of that fact.
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(3)
If the receiving bank debits an account of the
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sender with the receiving bank, payment
occurs when the debit is made to the extent the
debit is covered by a withdrawable credit balance
in the account.
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(b) If the sender
and receiving bank are members of a funds transfer system
that nets obligations multilaterally among participants,
the receiving bank receives final settlement when settlement
is complete in accordance with the rules of the system.
The obligation of the sender to pay the amount of a payment
order transmitted through the funds transfer system may
be satisfied, to the extent permitted by the rules of the
system, by setting off and applying against the sender's
obligation the right of the sender to receive payment from
the receiving bank of the amount of any other payment order
transmitted to the sender by the receiving bank through
the funds transfer system. The aggregate balance of obligations
owed by each sender to each receiving bank in the funds
transfer system may be satisfied, to the extent permitted
by the rules of the system, by setting off and applying
against that balance the aggregate balance of obligations
owed to the sender by other members of the system. The
aggregate balance is determined after the right of setoff
stated in the second sentence of this subsection has been
exercised.
(c) If 2 banks transmit payment
orders to each other under an agreement that settlement of the
obligations of each bank to the other under Section 4A-402
will be made at the end of the day or other period, the total amount
owed with respect to all orders transmitted by one bank shall be
set off against the total amount owed with respect to all orders
transmitted by the other bank. To the extent of the setoff, each
bank has made payment to the other.
(d) In a case not covered by subsection
(a), the time when payment of the sender's obligation under Section
4A-402(b) or 4A-402(c) occurs is governed by applicable
principles of law that determine when an obligation is satisfied.
(Source: P.A. 86-1291.)
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(810 ILCS 5/4A-404) (from Ch. 26,
par. 4A-404)
Sec. 4A-404. Obligation of
beneficiary's bank to pay and give notice to beneficiary.
(a) Subject to Sections 4A-211(e),
4A-405(d), and 4A-405(e), if a beneficiary's bank
accepts a payment order, the bank is obliged to pay the amount
of the order to the beneficiary of the order. Payment is due
on the payment date of the order, but if acceptance occurs on
the payment date after the close of the funds transfer business
day of the bank, payment is due on the next funds transfer business
day. If the bank refuses to pay after demand by the beneficiary
and receipt of notice of particular circumstances that will give
rise to consequential damages as a result of nonpayment, the
beneficiary may recover damages resulting from the refusal to
pay to the extent the bank had notice of the damages, unless
the bank proves that it did not pay because of a reasonable doubt
concerning the right of the beneficiary to payment.
(b) If a payment order accepted
by the beneficiary's bank instructs payment to an account of
the beneficiary, the bank is obliged to notify the beneficiary
of receipt of the order before midnight of
the next funds transfer business day following the payment date.
If the payment order does not instruct payment to an account
of the beneficiary, the bank is required to notify the beneficiary
only if notice is required by the order. Notice may be given
by first class mail or any other means reasonable in the circumstances.
If the bank fails to give the required notice, the bank is obliged
to pay interest to the beneficiary on the amount of the payment
order from the day notice should have been given until the day
the beneficiary learned of receipt of the payment order by the
bank. No other damages are recoverable. Reasonable attorney's
fees are also recoverable if demand for interest is made and
refused before an action is brought on the claim.
(c) The right of a beneficiary
to receive payment and damages as stated in subsection (a) may
not be varied by agreement or a funds transfer system rule. The
right of a beneficiary to be notified as stated in subsection
(b) may be varied by agreement of the beneficiary or by a funds
transfer system rule if the beneficiary is notified of the rule
before initiation of the funds transfer.
(Source: P.A. 86-1291.)
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(810 ILCS 5/4A-405) (from Ch. 26, par. 4A-405)
Sec. 4A-405. Payment by beneficiary's
bank to beneficiary.
(a) If the beneficiary's bank credits
an account of the beneficiary of a payment order, payment of
the bank's obligation under Section 4A-404(a) occurs when
and to the extent (i) the beneficiary is notified of the right
to withdraw the credit, (ii) the bank lawfully applies the credit
to a debt of the beneficiary, or (iii) funds with respect to
the order are otherwise made available to the beneficiary by
the bank.
(b) If the beneficiary's bank does
not credit an account of the beneficiary of a payment order,
the time when payment of the bank's obligation under Section
4A-404(a) occurs is governed by principles of law that
determine when an obligation is satisfied.
(c) Except as stated in subsections
(d) and (e), if the beneficiary's bank pays the beneficiary of
a payment order under a condition to payment or agreement of
the beneficiary giving the bank the right to recover payment
from the beneficiary if the bank does not receive payment of
the order, the condition to payment or agreement is not enforceable.
(d) A funds transfer system rule
may provide that payments made to beneficiaries of funds transfers
made through the system are provisional until receipt of payment
by the beneficiary's bank of the payment order it accepted. A
beneficiary's bank that makes a payment that is provisional under
the rule is entitled to refund from the beneficiary if (i) the
rule requires that both the beneficiary and the originator be
given notice of the provisional nature of the payment before
the funds transfer is initiated, (ii) the beneficiary, the beneficiary's
bank and the originator's bank agreed to be bound by the rule,
and (iii) the beneficiary's bank did not receive payment of the
payment order that it accepted. If the beneficiary is obliged
to refund payment to the beneficiary's bank, acceptance of the
payment order by the beneficiary's bank is nullified and no payment
by the originator of the funds transfer to the beneficiary occurs
under Section 4A-406.
(e) This subsection applies to
a funds transfer that includes a payment order transmitted over
a funds transfer system that (i) nets obligations multilaterally
among participants, and (ii) has in effect a loss sharing agreement
among participants for the purpose of providing funds necessary
to complete settlement of the obligations of one or more participants
that do not meet their settlement obligations. If the beneficiary's
bank in the funds transfer accepts a payment order and the system
fails to complete settlement pursuant to its rules with respect
to any payment order in the funds transfer, (i) the acceptance
by the beneficiary's bank is nullified and no person has any
right or obligation based on the acceptance, (ii) the beneficiary's
bank is entitled to recover payment from the beneficiary, (iii)
no payment by the originator to the beneficiary occurs under
Section 4A-406, and (iv) subject to Section 4A-402(e),
each sender in the funds transfer is excused from its obligation
to pay its payment order under Section 4A-402(c) because
the funds transfer has not been completed.
(Source: P.A. 86-1291.)
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(810 ILCS 5/4A-406) (from Ch. 26, par. 4A-406)
Sec. 4A-406. Payment by originator
to beneficiary; discharge of underlying obligation.
(a) Subject to Sections 4A-211(e),
4A-405(d), and 4A-405(e), the originator of a funds
transfer pays the beneficiary of the originator's payment order
(i) at the time a payment order for the benefit of the beneficiary
is accepted by the beneficiary's bank in the funds transfer and
(ii) in an amount equal to the amount of the order accepted by
the beneficiary's bank, but not more than the amount of the originator's
order.
(b) If payment under subsection
(a) is made to satisfy an obligation, the obligation is discharged
to the same extent discharge would result from payment to the
beneficiary of the same amount in money, unless (i) the payment
under subsection (a) was made by a means prohibited by the contract
of the beneficiary with respect to the obligation, (ii) the beneficiary,
within a reasonable time after receiving notice of receipt of
the order by the beneficiary's bank, notified the originator
of the beneficiary's refusal of the payment, (iii) funds with
respect to the order were not withdrawn by the beneficiary or
applied to a debt of the beneficiary, and (iv) the beneficiary
would suffer a loss that could reasonably have been avoided if
payment had been made by a means complying with the contract.
If payment by the originator does not result in discharge under
this Section the originator is subrogated to the rights of the
beneficiary to receive payment from the beneficiary's bank under
Section 4A-404(a).
(c) For the purpose of determining
whether discharge of an obligation occurs under subsection (b),
if the beneficiary's bank accepts a payment order in an amount
equal to the amount of the originator's payment order less charges
of one or more receiving banks in the funds transfer, payment
to the beneficiary is deemed to be in the amount of the originator's
order unless upon demand by the beneficiary the originator does
not pay the beneficiary the amount of the deducted charges.
(d) Rights of the originator or
of the beneficiary of the funds transfer under this Section may
be varied only by agreement of the originator and the beneficiary.
(Source: P.A. 86-1291.)
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