(810 ILCS 5/4A-303) (from Ch. 26, par. 4A-303)
Sec. 4A-303.
Erroneous execution of payment order.
(a) A receiving bank that (i) executes the payment order
of the sender by issuing a payment order in an amount greater than the
amount of the sender's order, or (ii) issues a payment order in execution
of the sender's order and then issues a duplicate order, is entitled to
payment of the amount of the sender's order under Section 4A-402(c) if that
subsection is otherwise satisfied. The bank is entitled to recover from the
beneficiary of the erroneous order the excess payment received to the
extent allowed by the law governing mistake and restitution.
(b) A receiving bank that executes the payment order of the sender by
issuing a payment order in an amount less than the amount of the sender's
order is entitled to payment of the amount of the sender's order under
Section 4A-402(c) if (i) that subsection is otherwise satisfied and (ii)
the bank corrects its mistake by issuing an additional payment order for
the benefit of the beneficiary of the sender's order. If the error is not
corrected, the issuer of the erroneous order is entitled to receive or
retain payment from the sender of the order it accepted only to the extent
of the amount of the erroneous order. This subsection does not apply if
the receiving bank executes the sender's payment order by issuing a payment
order in an amount less than the amount of the sender's order
for the purpose of obtaining payment of its charges for services and
expenses pursuant to the instruction of the sender.
(c) If a receiving bank executes the payment order of the sender by
issuing a payment order to a beneficiary different from the beneficiary of
the sender's order and the funds transfer is completed on the basis of that
error, the sender of the payment order that was erroneously executed and
all previous senders in the funds transfer are not obliged to pay the
payment orders they issued. The issuer of the erroneous order is entitled
to recover from the beneficiary of the order the payment received to the
extent allowed by the law governing mistake and restitution.
(Source: P.A. 86-1291.)
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