(810 ILCS 5/4A-406)
(from Ch. 26, par. 4A-406)
Payment by originator to beneficiary; discharge of
(a) Subject to Sections 4A-211(e), 4A-405(d), and
4A-405(e), the originator of a funds transfer pays the beneficiary of the
originator's payment order (i) at the time a payment order for the benefit
of the beneficiary is accepted by the beneficiary's bank in the funds
transfer and (ii) in an amount equal to the amount of the order accepted by
the beneficiary's bank, but not more than the amount of the originator's order.
(b) If payment under subsection (a) is made to satisfy an obligation, the
obligation is discharged to the same extent discharge would result from
payment to the beneficiary of the same amount in money, unless (i) the
payment under subsection (a) was made by a means prohibited by the contract
of the beneficiary with respect to the obligation, (ii) the beneficiary,
within a reasonable time after receiving notice of receipt of the order by
the beneficiary's bank, notified the originator of the beneficiary's
refusal of the payment, (iii) funds with respect to the order were not
withdrawn by the beneficiary or applied to a debt of the beneficiary, and
(iv) the beneficiary would suffer a loss that could reasonably have been
avoided if payment had been made by a means complying with the contract.
If payment by the originator does not result in discharge under this
Section the originator is subrogated to the rights of the beneficiary to
receive payment from the beneficiary's bank under Section 4A-404(a).
(c) For the purpose of determining whether discharge of an obligation
occurs under subsection (b), if the beneficiary's bank accepts a payment
order in an amount equal to the amount of the originator's payment order
less charges of one or more receiving banks in the funds transfer, payment
to the beneficiary is deemed to be in the amount of the originator's order
unless upon demand by the beneficiary the originator does not pay the
beneficiary the amount of the deducted charges.
(d) Rights of the originator or of the beneficiary of the funds transfer
under this Section may be varied only by agreement of the originator and
(Source: P.A. 86-1291.)