                                 CODE OF VIRGINIA

AUTHORIZED AND VERIFIED PAYMENT ORDERS (§ 8.4A-202)

a. A payment order received by the receiving bank is the authorized order of the
person identified as sender if that person authorized the order or is otherwise
bound by it under the law of agency.

b. If a bank and its customer have agreed that the authenticity of payment
orders issued to the bank in the name of the customer as sender will be verified
pursuant to a security procedure, a payment order received by the receiving bank
is effective as the order of the customer, whether or not authorized, if (i) the
security procedure is a commercially reasonable method of providing security
against unauthorized payment orders, and (ii) the bank proves that it accepted
the payment order in good faith and in compliance with the bank&#8217;s
obligations under the security procedure and any agreement or instruction of the
customer, evidenced by a record, restricting acceptance of payment orders issued
in the name of the customer. The bank is not required to follow an instruction
that violates an agreement with the customer, evidenced by a record, or notice
of which is not received at a time and in a manner affording the bank a
reasonable opportunity to act on it before the payment order is accepted.

c. Commercial reasonableness of a security procedure is a question of law to be
determined by considering the wishes of the customer expressed to the bank, the
circumstances of the customer known to the bank, including the size, type, and
frequency of payment orders normally issued by the customer to the bank,
alternative security procedures offered to the customer, and security procedures
in general use by customers and receiving banks similarly situated. A security
procedure is deemed to be commercially reasonable if (i) the security procedure
was chosen by the customer after the bank offered, and the customer refused, a
security procedure that was commercially reasonable for that customer, and (ii)
the customer expressly agreed in a record to be bound by any payment order,
whether or not authorized, issued in its name and accepted by the bank in
compliance with the bank&#8217;s obligations under the security procedure chosen
by the customer.

d. The term &#8220;sender&#8221; in this title includes the customer in whose
name a payment order is issued if the order is the authorized order of the
customer under subsection (a) of this section, or it is effective as the order
of the customer under subsection (b) of this section.

e. This section applies to amendments and cancellations of payment orders to the
same extent it applies to payment orders.

f. Except as provided in this section and in subdivision (a) (1) of &#xA7;
8.4A-203, rights and obligations arising under this section or &#xA7; 8.4A-203
may not be varied by agreement.

HISTORY: 1990, c. 9; 2024, c. 652.