Section 4A-211 - Cancellation and amendment of payment order(a) A communication of the sender of a payment order canceling or amending the order may be transmitted to the receiving bank orally or in a record. If a security procedure is in effect between the sender and the receiving bank, the communication is not effective to cancel or amend the order unless the communication is verified pursuant to the security procedure or the bank agrees to the cancellation or amendment.(b) Subject to subsection (a) of this section, a communication by the sender canceling or amending a payment order is effective to cancel or amend the order if notice of the communication is received at a time and in a manner affording the receiving bank a reasonable opportunity to act on the communication before the bank accepts the payment order.(c) After a payment order has been accepted, cancellation or amendment of the order is not effective unless the receiving bank agrees or a funds-transfer system rule allows cancellation or amendment without agreement of the bank. (1) With respect to a payment order accepted by a receiving bank other than the beneficiary's bank, cancellation or amendment is not effective unless a conforming cancellation or amendment of the payment order issued by the receiving bank is also made.(2) With respect to a payment order accepted by the beneficiary's bank, cancellation or amendment is not effective unless the order was issued in execution of an unauthorized payment order, or because of a mistake by a sender in the funds transfer which resulted in the issuance of a payment order (i) that is a duplicate of a payment order previously issued by the sender, (ii) that orders payment to a beneficiary not entitled to receive payment from the originator, or (iii) that orders payment in an amount greater than the amount the beneficiary was entitled to receive from the originator. If the payment order is canceled or amended, the beneficiary's 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.(d) An unaccepted payment order is canceled by operation of law at the close of the fifth funds-transfer business day of the receiving bank after the execution date or payment date of the order.(e) A canceled payment order cannot be accepted. If an accepted payment order is canceled, the acceptance is nullified and no person has any right or obligation based on the acceptance. Amendment of a payment order is deemed to be cancellation of the original order at the time of amendment and issue of a new payment order in the amended form at the same time.(f) Unless otherwise provided in an agreement of the parties or in a funds-transfer system rule, if the receiving bank, after accepting a payment order, agrees to cancellation or amendment of the order by the sender or is bound by a funds-transfer system rule allowing cancellation or amendment without the bank's agreement, the sender, whether or not cancellation or amendment is effective, is liable to the bank for any loss and expenses, including reasonable attorney fees, incurred by the bank as a result of the cancellation or amendment or attempted cancellation or amendment.(g) A payment order is not revoked by the death or legal incapacity of the sender unless the receiving bank knows of the death or of an adjudication of incapacity by a court of competent jurisdiction and has reasonable opportunity to act before acceptance of the order.(h) A funds-transfer system rule is not effective to the extent it conflicts with paragraph (2) of subsection (c) of this section.Okla. Stat. tit. 12A, § 4A-211
Amended by Laws 2024 , c. 13, s. 31, eff. 11/1/2024.Added by Laws 1990, SB 641, c. 110, § 19, eff. 7/1/1991.Oklahoma Code Comment
There has been some litigation under law prior to Article 4A over cancellation of payment orders. See the Mellon, Delbrueck & Co. and Banque Worms cases and their resolution under Article 4A discussed in the introductory comment.
The time and manner of receipt of a cancellation order or amendment is subject to definition by agreement (with the originator) or by funds transfer system rule (with other senders). This definition may cover the content of the communication, the minimum time which the recipient must have to react and the person at the recipient who must receive the communication. An exact description may be required; however, efforts by the recipient to accommodate the sender may make the recipient liable to cancel or amend an order which it cannot identify. See Parr v. Security National Bank, 680 P. 2d 648 (Okla 1984).
A funds transfer system rule may allow cancellation or amendment of an accepted payment order without agreement of the receiving bank, but only for the reasons set forth in subsection (c)(2) of this section. If such an amendment or cancellation occurs, the sender is liable to the receiving bank for any loss and expenses, including reasonable attorney's fees, incurred by the bank as a result. Once a payment order has been accepted, the sender has no "right" to "stop payment" and generally a payment order cannot be canceled or amended after it has been accepted. The receiving bank may agree to an amendment or cancellation. By doing so the receiving bank could have liability to the beneficiary. It would have had no liability if it had refused the request. If the receiving bank agrees to such an amendment or cancellation, the sender is liable to the receiving bank for any loss and expenses, including reasonable attorney's fees, incurred by the bank as a result of its agreement.