California Commercial Code

§ 3418

COM § 3418 Effective Jan 1, 1993Div. 3 · Ch. 4

Statute text

(a)Except as provided in subdivision (c), if the drawee of a draft pays or accepts the draft and the drawee acted on the mistaken belief that (1) payment of the draft had not been stopped pursuant to Section 4403 or (2) the signature of the drawer of the draft was authorized, the drawee may recover the amount of the draft from the person to whom or for whose benefit payment was made or, in the case of acceptance, may revoke the acceptance. Rights of the drawee under this subdivision are not affected by failure of the drawee to exercise ordinary care in paying or accepting the draft.

(b)Except as provided in subdivision (c), if an instrument has been paid or accepted by mistake and the case is not covered by subdivision (a), the person paying or accepting may, to the extent permitted by the law governing mistake and restitution, (1) recover the payment from the person to whom or for whose benefit payment was made or (2) in the case of acceptance, may revoke the acceptance.

(c)The remedies provided by subdivision (a) or (b) may not be asserted against a person who took the instrument in good faith and for value or who in good faith changed position in reliance on the payment or acceptance. This subdivision does not limit remedies provided by Section 3417 or 4407.

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Legislative history

Repealed and added by Stats. 1992, Ch. 914, Sec. 6. Effective January 1, 1993.