                                 CODE OF VIRGINIA

PAYMENT BY ORIGINATOR TO BENEFICIARY; DISCHARGE OF UNDERLYING OBLIGATION (§
8.4A-406)

a. Subject to subsection (e) of &#xA7; 8.4A-211 and subsections (d) and (e) of
&#xA7; 8.4A-405, the originator of a funds transfer pays the beneficiary of the
originator&#8217;s payment order (i) at the time a payment order for the benefit
of the beneficiary is accepted by the beneficiary&#8217;s bank in the funds
transfer and (ii) in an amount equal to the amount of the order accepted by the
beneficiary&#8217;s bank, but not more than the amount of the originator&#8217;s
order.

b. If payment under subsection (a) of this section 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) of this section 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&#8217;s bank, notified the originator of the
beneficiary&#8217;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order were not withdrawn by the beneficiary or applied to a debt of the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&#8217;s bank under subsection (a) of &#xA7;
8.4A-404.

c. For the purpose of determining whether discharge of an obligation occurs
under subsection (b) of this section, if the beneficiary&#8217;s bank accepts a
payment order in an amount equal to the amount of the originator&#8217;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&#8217;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 a funds transfer under this
section may be varied only by agreement of the originator and the beneficiary.

HISTORY: 1990, c. 9.