(4A-205) Erroneous payment orders
N.D. Cent. Code § 41-04.1-13
in effect41-04.1-13. (4A-205) Erroneous payment orders
1. If an accepted payment order was transmitted pursuant to a security procedure for the
detection of error and the payment order erroneously instructed payment to a
beneficiary not intended by the sender, erroneously instructed payment in an amount
greater than the amount intended by the sender, or was an erroneously transmitted
duplicate of a payment order previously sent by the sender, the following rules apply:
a. If the sender proves that the sender or a person acting on behalf of the sender
pursuant to section 41-04.1-14 complied with the security procedure and that the
error would have been detected if the receiving bank had also complied, the
sender is not obliged to pay the order to the extent stated in subdivisions b and c.
b. If the funds transfer is completed on the basis of an erroneous payment order,
other than an erroneously transmitted duplicate of a payment order, the sender is
not obliged to pay the order and the receiving 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.
c. If the funds transfer is completed on the basis of a payment order erroneously
instructing payment in an amount greater than intended by the sender, the sender
is not obliged to pay the order to the extent the amount received by the
beneficiary is greater than the amount intended by the sender. In that case, the
receiving bank is entitled to recover from the beneficiary the excess amount
received to the extent allowed by the law governing mistake and restitution.
2. If the sender of an erroneous payment order described in subsection 1 is not obliged
to pay all or part of the order and if the sender receives notification from the receiving
bank that the order was accepted by the bank or that the sender's account was
debited with respect to the order, the sender has a duty to exercise ordinary care, on
the basis of information available to the sender, to discover the error with respect to
the order and to advise the bank of the relevant facts within a reasonable time, not
exceeding ninety days, after the bank's notification was received by the sender. If the
bank proves that the sender failed to perform that duty, the sender is liable to the bank
for the loss the bank proves it incurred as a result of the failure, but the liability of the
sender may not exceed the amount of the sender's order.
3. This section applies to amendments to payment orders to the same extent it applies to
payment orders.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t41c04-1.pdf#nameddest=41-04p1-13Fetched: 10/16/2026