California Commercial Code

§ 11405

COM § 11405Div. 11 · Ch. 4

Statute text

(a)If the beneficiary’s bank credits an account of the beneficiary of a payment order, payment of the bank’s obligation under subdivision (a) of Section 11404 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 subdivision (a) of Section 11404 occurs is governed by principles of law that determine when an obligation is satisfied.

(c)Except as stated in subdivisions (d) and (e), 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.

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Legislative history

Added by Stats. 1990, Ch. 125, Sec. 2.