The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
(Cite as: 9A V.S.A. § 4A-405)
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§ 4A—405. Payment by beneficiary’s bank to beneficiary
(a) If the beneficiary’s bank credits an account of the beneficiary of a payment order,
payment of the bank’s obligation under subsection 4A—404(a) of this title occurs when and to the extent (i) the beneficiary is notified of the right to withdraw
the credit, (ii) the bank lawfully applies the credit to a debt of the beneficiary,
or (iii) funds with respect to the order are otherwise made available to the beneficiary
by the bank.
(b) If the beneficiary’s bank does not credit an account of the beneficiary of a payment
order, the time when payment of the bank’s obligation under subsection 4A—404(a) of this title occurs is governed by principles of law that determine when an obligation is satisfied.
(c) Except as stated in subsections (d) and (e) of this section , if the beneficiary’s
bank pays the beneficiary of a payment order under a condition to payment or agreement
of the beneficiary giving the bank the right to recover payment from the beneficiary
if the bank does not receive payment of the order, the condition to payment or agreement
is not enforceable.
(d) A funds-transfer system rule may provide that payments made to beneficiaries of funds
transfers made through the system are provisional until receipt of payment by the
beneficiary’s bank of the payment order it accepted. A beneficiary’s bank that makes
a payment that is provisional under the rule is entitled to refund from the beneficiary
if (i) the rule requires that both the beneficiary and the originator be given notice
of the provisional nature of the payment before the funds transfer is initiated, (ii)
the beneficiary, the beneficiary’s bank and the originator’s bank agreed to be bound
by the rule, and (iii) the beneficiary’s bank did not receive payment of the payment
order that it accepted. If the beneficiary is obliged to refund payment to the beneficiary’s
bank, acceptance of the payment order by the beneficiary’s bank is nullified and no
payment by the originator of the funds transfer to the beneficiary occurs under section 4A—406 of this title.
(e) This subsection applies to a funds transfer that includes a payment order transmitted
over a funds-transfer system that (i) nets obligations multilaterally among participants,
and (ii) has in effect a loss-sharing agreement among participants for the purpose
of providing funds necessary to complete settlement of the obligations of one or more
participants that do not meet their settlement obligations. If the beneficiary’s bank
in the funds transfer accepts a payment order and the system fails to complete settlement
pursuant to its rules with respect to any payment order in the funds transfer, (i)
the acceptance by the beneficiary’s bank is nullified and no person has any right
or obligation based on the acceptance, (ii) the beneficiary’s bank is entitled to
recover payment from the beneficiary, (iii) no payment by the originator to the beneficiary
occurs under section 4A—406 of this title, and (iv) subject to subsection 4A—402(e) of this title, each sender in the funds transfer is excused from its obligation to pay its payment
order under subsection 4A—402(c) of this title because the funds transfer has not been completed. (Added 1993, No. 158 (Adj. Sess.), § 14, eff. Jan. 1, 1995.)