1. (a) Subject to subsection (e) of Section 19 and subsections (d) and (e) of Section 30 of this act, if a beneficiary's bank accepts a payment order, the bank is obliged to pay the amount of the order to the beneficiary of the order. Payment is due on the payment date of the order, but if acceptance occurs on the payment date after the close of the funds-transfer business day of the bank, payment is due on the next funds-transfer business day. If the bank refuses to pay after demand by the beneficiary and receipt of notice of particular circumstances that will give rise to consequential damages as a result of nonpayment, the beneficiary may recover damages resulting from the refusal to pay to the extent the bank had notice of the damages, unless the bank proves that it did not pay because of a reasonable doubt concerning the right of the beneficiary to payment.

2. (b) If a

   payment order accepted by the beneficiary's bank instructs payment to an account of the beneficiary, the bank is obliged to notify the beneficiary of receipt of the order before midnight of the next funds-transfer business day following the payment date. If the payment order does not instruct payment to an account of the beneficiary, the bank is required to notify the beneficiary only if notice is required by the order. Notice may be given by first class mail or any other means reasonable in the circumstances. If the bank fails to give the required notice, the bank is obliged to pay interest to the beneficiary on the amount of the payment order from the day notice should have been given until the day the beneficiary learned of receipt of the payment order by the bank. No other damages are recoverable. Reasonable attorney's fees are also recoverable if demand for interest is made and refused before an action is brought on the claim.

3. (c) The

   right of a beneficiary to receive payment and damages as stated in subsection (a) of this section may not be varied by agreement or a funds-transfer system rule. The right of a beneficiary to be notified as stated in subsection (b) of this section may be varied by agreement of the beneficiary or by a funds-transfer system rule if the beneficiary is notified of the rule before initiation of the funds transfer.

   Oklahoma Code Comment

   A

   beneficiary has the right to be notified of the receipt of a payment order. This notice must be given by first-class mail or by other reasonable means. A funds transfer system rule may vary this right if the beneficiary is notified of the rule before the initiation of the transfer but the rule may not vary the damages for failure to notify.

   Section

   4A-404(a) permits a beneficiary, whom a bank has wrongly refused to pay the amount of a payment order after acceptance, to recover consequential damages after giving notice to the bank of the particular circumstances which will result in injury of the extent of the damages. If notice of the circumstances is not given, then consequential damages will not be allowed. In effect, this provision places a limitation on damages arising from breach of a statutory duty similar to the limitations placed on breach of contract by Hadley v. Baxendale, discussed more fully in Official Comment 2 to Section 4A-305.

   A related question concerns the law which would govern in the event the

   beneficiary received notice of acceptance, and then drew a check against the amount of the payment order which was then dishonored by the beneficiary's bank. If Article 4A governs the dishonor as a "refusal to pay", then consequential damages are only available if notice of the circumstances is first given by the beneficiary to the beneficiary's bank. On the other hand, under 12A O.S. Section 4-402, the wrongful dishonor of a check will result in liability for all proximately caused damages, including consequential damages, regardless of notification. In such an instance, the Official Comment to revised UCC § 4-402 indicates the measure of damages should be controlled by UCC Article 4, because the issuance of the beneficiary's check marks the beginning of a new transaction, with its own purposes and consequences separate from completion of the wire transfer. It is possible that the bank's exposure under UCC Article 4 may be limited by agreement. While 12A O.S. Section 4-103 prohibits any agreement which would limit the measure of damages resulting from the bank's failure to exercise ordinary care, it permits the Bank and its customer to determine the standard by which ordinary care will be measured. This provision might permit the parties to incorporate some of Article 4A's standards, or to require § 4A 404 notice before consequentials can be recovered.

   Section 4A-4u4(a) excuses the

   beneficiary's bank from payment if the bank can prove it had a "reasonable doubt" concerning the beneficiary's right to payment. For example, although the beneficiary's bank will not ordinarily be required to compare the beneficiary's name with the bank's account number for consistency, if the bank should discover a discrepancy after acceptance, it would be justified in withholding payment until the discrepancy is resolved. As another example, if a third party should give notice to the bank of a claim on the funds to be paid to the beneficiary, pursuant to 6 O.S. § 905 the bank will be entitled to withhold payment pending resolution of ownership to the funds. See also Oklahoma Comment under 4A-502.

Laws 1990, SB 641, c. 110, § 29, eff. July 1, 1991.