554.12404 Obligation of beneficiary’s bank to pay and give notice to beneficiary. 1. Subject to sections 554.12211, subsection 5, and 554.12405, subsections 4 and 5, if a beneficiary’s bank accepts a payment order, the beneficiary bank shall pay the amountof the order to the beneficiary of the order. Payment is due on the payment date of theorder, but if acceptance occurs on the payment date after the close of the funds-transferbusiness day of the beneficiary’s bank, payment is due on the next funds-transfer businessday. If the beneficiary’s bank refuses to pay upon demand by the beneficiary and receipt ofnotice of particular circumstances that will give rise to consequential damages as a result ofnonpayment, the beneficiary may recover damages resulting from the refusal to pay to theextent the beneficiary’s bank had notice of the damages, unless the beneficiary’s bank provesthat it did not pay because of a reasonable doubt concerning the right of the beneficiary topayment. 2. If a payment order accepted by the beneficiary’s bank instructs payment to an account of the beneficiary, the bank shall notify the beneficiary of receipt of the order before midnightof the next . 2. If a payment order accepted by the beneficiary’s bank instructs payment to an account of the beneficiary, the bank shall notify the beneficiary of receipt of the order before midnightof the next funds-transfer business day following the payment date. If the payment order doesnot instruct payment to an account of the beneficiary, the beneficiary’s bank is required tonotify the beneficiary only if notice is required by the order. Notice may be given by firstclass mail or any other means reasonable in the circumstances. If the beneficiary’s bank failsto give the required notice, the bank shall pay interest to the beneficiary on the amount ofthe payment order from the day notice should have been given until the day the beneficiarylearned of receipt of the payment order by the beneficiary’s bank. No other damages arerecoverable. Reasonable attorney’s fees are also recoverable if demand for interest is madeand refused before an action is brought on the claim. 3. The right of a beneficiary to receive payment and damages as stated in subsection 1 may not be varied by agreement or a funds-transfer system rule. efused before an action is brought on the claim. 3. The right of a beneficiary to receive payment and damages as stated in subsection 1 may not be varied by agreement or a funds-transfer system rule. The right of a beneficiaryto be notified as stated in subsection 2 may be varied by agreement of the beneficiary or bya funds-transfer system rule if the beneficiary is notified of the rule before initiation of thefunds transfer. 92 Acts, ch 1146, §29Referred to in §554.12405, 554.12406, 554.12501 Sat Dec 23 11:02:58 2023 Iowa Code 2024, Section 554.12404 (26, 0)
Iowa Legal Code