                                 CODE OF VIRGINIA

OBLIGATION OF BENEFICIARY&#8217;S BANK TO PAY AND GIVE NOTICE TO BENEFICIARY (§
8.4A-404)

a. Subject to subsection (e) of &#xA7; 8.4A-211, and subsections (d) and (e) of
&#xA7; 8.4A-405, if a beneficiary&#8217;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 receive 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&#8217;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&#8217;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) of this section 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) of this section 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.

HISTORY: 1990, c. 9.