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Alaska Statutes.

Title 45. Trade and Commerce

Chapter 14. Funds Transfers

Section 202. Authorized and Verified Payment Orders.

AS 45.14.202. Authorized and Verified Payment Orders.

(a) 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.

(b) 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

(1) the security procedure is a commercially reasonable method of providing security against unauthorized payment orders; and

(2) the bank proves that it accepted the payment order in good faith and in compliance with the security procedure and any written agreement or instruction of the customer restricting acceptance of payment orders issued in the name of the customer; the bank is not required to follow an instruction that violates a written agreement with the customer 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.

(c) 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 considered to be commercially reasonable if

(1) 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

(2) the customer expressly agreed in writing to be bound by a payment order, whether or not authorized, issued in its name and accepted by the bank in compliance with the security procedure chosen by the customer.

(d) This section applies to amendments and cancellations of payment orders to the same extent that it applies to payment orders.

(e) Except as provided in this section and in AS 45.14.203 (a)(1), rights and obligations arising under this section or AS 45.14.203 may not be varied by agreement.

(f) In this chapter, "sender" includes the customer in whose name a payment order is issued if the order is the authorized order of the customer under (a) of this section, or it is effective as the order of the customer under (b) of this section.

Note to HTML Version:

This version of the Alaska Statutes is current through December, 2004. The Alaska Statutes were automatically converted to HTML from a plain text format. Every effort has been made to ensure their accuracy, but this can not be guaranteed. If it is critical that the precise terms of the Alaska Statutes be known, it is recommended that more formal sources be consulted. For statutes adopted after the effective date of these statutes, see, Alaska State Legislature If any errors are found, please e-mail Touch N' Go systems at E-mail. We hope you find this information useful.

Last modified 9/3/2005