1. A payment order is rejected by the receiving bank by a notice of rejection transmitted to the sender orally or in a record. A notice of rejection need not use any particular words and is sufficient if the notice indicates that the receiving bank isrejecting the order or willnot execute or pay the order. Rejection is effective when the notice is given iftransmission isby ameans that isreasonable under the circumstances. Ifnotice of rejection isgiven by a means that is not reasonable, rejection iseffective when the notice isreceived. If an agreement of the sender and receiving bank establishes the means to be used to reject a payment order, any means complying with the agreement is reasonable and any means not complying isnot reasonable unless no significant delay in receipt of the notice resulted from the use of the noncomplying means. 2. This subsection applies if a receiving bank other than the beneficiary’s bank fails to execute a payment order despite the existence on the execution date of a withdrawable credit balance in an authorized account of the sender sufficientto cover the order. Ifthe sender does not receive notice of rejection of the order on the execution date and the authorized account ofthe sender does not bear interest, the bank shall pay interest tothe sender on the amount of the order for the number of days elapsing after the execution date to the earlier of the day the order iscanceled pursuant to section 554.12211, subsection 4,or the day the sender receives notice or learns that the order was not executed, counting the final day of the period as an elapsed day. If the withdrawable credit balance during that period falls below the amount of the order, the amount of interest is reduced accordingly. 3. If a receiving bank suspends payments, allunaccepted payment orders issued to the receiving bank are deemed rejected atthe time the bank suspends payments. 4. Acceptance of a payment order precludes a later rejection of the order. Rejection of a payment order precludes a later acceptance of the order.
‹ Prev All Iowa sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.