§ 4A—211. Cancellation and amendment of payment order
(a) A communication of the sender of a payment order cancelling or amending the order
may be transmitted to the receiving bank orally or in a record. If a security procedure
is in effect between the sender and the receiving bank, the communication is not effective
to cancel or amend the order unless the communication is verified pursuant to the
security procedure or the bank agrees to the cancellation or amendment.
(b) Subject to subsection (a) of this section, a communication by the sender cancelling
or amending a payment order is effective to cancel or amend the order if notice of
the communication is received at a time and in a manner affording the receiving bank
a reasonable opportunity to act on the communication before the bank accepts the payment
order.
(c) After a payment order has been accepted, cancellation or amendment of the order is
not effective unless the receiving bank agrees or a funds-transfer system rule allows
cancellation or amendment without agreement of the bank.
(1) With respect to a payment order accepted by a receiving bank other than the beneficiary’s
bank, cancellation or amendment is not effective unless a conforming cancellation
or amendment of the payment order issued by the receiving bank is also made.
(2) With respect to a payment order accepted by the beneficiary’s bank, cancellation or
amendment is not effective unless the order was issued in execution of an unauthorized
payment order, or because of a mistake by a sender in the funds transfer which resulted
in the issuance of a payment order (i) that is a duplicate of a payment order previously
issued by the sender, (ii) that orders payment to a beneficiary not entitled to receive
payment from the originator, or (iii) that orders payment in an amount greater than
the amount the beneficiary was entitled to receive from the originator. If the payment
order is cancelled or amended, the beneficiary’s 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.
(d) An unaccepted payment order is cancelled by operation of law at the close of the fifth
funds-transfer business day of the receiving bank after the execution date or payment
date of the order.
(e) A cancelled payment order cannot be accepted. If an accepted payment order is cancelled,
the acceptance is nullified and no person has any right or obligation based on the
acceptance. Amendment of a payment order is deemed to be cancellation of the original
order at the time of amendment and issue of a new payment order in the amended form
at the same time.
(f) Unless otherwise provided in an agreement of the parties or in a funds-transfer system
rule, if the receiving bank, after accepting a payment order, agrees to cancellation
or amendment of the order by the sender or is bound by a funds-transfer system rule
allowing cancellation or amendment without the bank’s agreement, the sender, whether
or not cancellation or amendment is effective, is liable to the bank for any loss
and expenses, including reasonable attorney’s fees, incurred by the bank as a result
of the cancellation or amendment or attempted cancellation or amendment.
(g) A payment order is not revoked by the death or legal incapacity of the sender unless
the receiving bank knows of the death or of an adjudication of incapacity by a court
of competent jurisdiction and has reasonable opportunity to act before acceptance
of the order.
(h) A funds-transfer system rule is not effective to the extent it conflicts with subdivision
(c)(2) of this section. (Added 1993, No. 158 (Adj. Sess.), § 14, eff. Jan. 1, 1995; amended 2025, No. 17, § 5, eff. July 1, 2025.)