Section 4A205 - Erroneous payment orders(a) Types of erroneous payment orders.--(1) The rules set forth under paragraph (2) apply if an accepted payment order was transmitted pursuant to a security procedure for the detection of error and the payment order: (i) erroneously instructed payment to a beneficiary not intended by the sender;(ii) erroneously instructed payment in an amount greater than the amount intended by the sender; or(iii) was an erroneously transmitted duplicate of a payment order previously sent by the sender.(2)(i) If the sender proves that the sender or a person acting on behalf of the sender pursuant to section 4A206 (relating to transmission of payment order through funds-transfer or other communication system) complied with the security procedure and that the error would have been detected if the receiving bank had also complied, the sender is not obliged to pay the order to the extent stated in subparagraphs (ii) and (iii).(ii) If the funds transfer is completed on the basis of an erroneous payment order described in paragraph (1)(i) or (iii), the sender is not obliged to pay the order and the receiving 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.(iii) If the funds transfer is completed on the basis of a payment order described in paragraph (1)(ii), the sender is not obliged to pay the order to the extent the amount received by the beneficiary is greater than the amount intended by the sender. In that case, the receiving bank is entitled to recover from the beneficiary the excess amount received to the extent allowed by the law governing mistake and restitution.(b) Duty of sender.--If the sender of an erroneous payment order described in subsection (a) is not obliged to pay all or part of the order and the sender receives notification from the receiving bank that the order was accepted by the bank or that the sender's account was debited with respect to the order, the sender has a duty to exercise ordinary care, on the basis of information available to the sender, to discover the error with respect to the order and to advise the bank of the relevant facts within a reasonable time, not exceeding 90 days, after the bank's notification was received by the sender. If the bank proves that the sender failed to perform that duty, the sender is liable to the bank for the loss the bank proves it incurred as a result of the failure, but the liability of the sender may not exceed the amount of the sender's order.(c) Amendments to payment orders.--This section applies to amendments to payment orders to the same extent it applies to payment orders.1992, July 9, P.L. 507, No. 97, § 15, effective in one year.