                                 CODE OF VIRGINIA

ERRONEOUS PAYMENT ORDERS (§ 8.4A-205)

a. If an accepted payment order was transmitted pursuant to a security procedure
for the detection of error and the payment order (i) erroneously instructed
payment to a beneficiary not intended by the sender, (ii) erroneously instructed
payment in an amount greater than the amount intended by the sender, or (iii)
was an erroneously transmitted duplicate of a payment order previously sent by
the sender, the following rules apply:

   1. If the sender proves that the sender or a person acting on behalf of the
   sender pursuant to &#xA7; 8.4A-206 complied with the security procedure and
   that the error would have been detected if the receiving bank had also
   complied, the sender is not obliged to pay the order to the extent stated in
   subdivisions (2) and (3) of this subsection.

   2. If the funds transfer is completed on the basis of an erroneous payment
   order described in clause (i) or (iii) of this subsection, the sender is not
   obliged to pay the order and the receiving bank is entitled to recover from
   the beneficiary any amount paid to the beneficiary to the extent allowed by
   the law governing mistake and restitution.

   3. If the funds transfer is completed on the basis of a payment order
   described in clause (ii) of this subsection, the sender is not obliged to pay
   the order to the extent the amount received by the beneficiary is greater than
   the amount intended by the sender. In that case, the receiving bank is
   entitled to recover from the beneficiary the excess amount received to the
   extent allowed by the law governing mistake and restitution.

b. If (i) the sender of an erroneous payment order described in subsection (a)
of this section is not obliged to pay all or part of the order, and (ii) the
sender receives notification from the receiving bank that the order was accepted
by the bank or that the sender&#8217;s account was debited with respect to the
order, the sender has a duty to exercise ordinary care, on the basis of
information available to the sender, to discover the error with respect to the
order and to advise the bank of the relevant facts within a reasonable time, not
exceeding ninety days, after the bank&#8217;s notification was received by the
sender. If the bank proves that the sender failed to perform that duty, the
sender is liable to the bank for the loss the bank proves it incurred as a
result of the failure, but the liability of the sender may not exceed the amount
of the sender&#8217;s order.

c. This section applies to amendments to payment orders to the same extent it
applies to payment orders.

HISTORY: 1990, c. 9.