(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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(2) If the sender is a bank and the sender (i) | ||
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(3) If the receiving bank debits an account of the | ||
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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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