(4A-202) Authorized and verified payment orders
N.D. Cent. Code § 41-04.1-10
in effect41-04.1-10. (4A-202) Authorized and verified payment orders
1. A payment order received by the receiving bank is the authorized order of the person
identified as sender if that person authorized the order or is otherwise bound by it
under the law of agency.
2. If a bank and its customer have agreed that the authenticity of payment orders issued
to the bank in the name of the customer as sender will be verified under a security
procedure, a payment order received by the receiving bank is effective as the order of
the customer, whether or not authorized, if the security procedure is a commercially
reasonable method of providing security against unauthorized payment orders, and
the bank proves that it accepted the payment order in good faith and in compliance
with the bank's obligations under the security procedure and any agreement or
instruction of the customer, evidenced by a record, restricting acceptance of payment
orders issued in the name of the customer. The bank is not required to follow an
instruction that violates an agreement with the customer, evidenced by a record, or
notice of which is not received at a time and in a manner affording the bank a
reasonable opportunity to act on it before the payment order is accepted.
3. Commercial reasonableness of a security procedure is a question of law to be
determined by considering the wishes of the customer expressed to the bank, the
circumstances of the customer known to the bank, including the size, type, and
frequency of payment orders normally issued by the customer to the bank, alternative
security procedures offered to the customer, and security procedures in general use by
customers and receiving banks similarly situated. A security procedure is deemed to
be commercially reasonable if the security procedure was chosen by the customer
after the bank offered, and the customer refused, a security procedure that was
commercially reasonable for that customer, and the customer expressly agreed in a
record to be bound by any payment order, whether or not authorized, issued in its
name and accepted by the bank in compliance with the bank's obligations under the
security procedure chosen by the customer.
4. In this chapter the term "sender" includes the customer in whose name a payment
order is issued if the order is the authorized order of the customer under subsection 1
or is effective as the order of the customer under subsection 2.
5. This section applies to amendments and cancellations of payment orders to the same
extent it applies to payment orders.
6. Except as provided in this section and in subdivision a of subsection 1 of section
41-04.1-11, rights and obligations arising under this section or section 41-04.1-11 may
not be varied by agreement.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t41c04-1.pdf#nameddest=41-04p1-10Fetched: 10/16/2026