Tex. Bus. & Com. Code Section 4A.305
Liability for Late or Improper Execution or Failure to Execute Payment Order


(a)

If a funds transfer is completed but execution of a payment order by the receiving bank in breach of Section 4A.302 (Obligations of Receiving Bank in Execution of Payment Order) of this chapter results in delay in payment to the beneficiary, the bank is obliged to pay interest to either the originator or the beneficiary of the funds transfer for the period of delay caused by the improper execution. Except as provided by Subsection (c), additional damages are not recoverable.

(b)

If execution of a payment order by a receiving bank in breach of Section 4A.302 (Obligations of Receiving Bank in Execution of Payment Order) results in (i) noncompletion of the funds transfer, (ii) failure to use an intermediary bank designated by the originator, or (iii) issuance of a payment order that does not comply with the terms of the payment order of the originator, the bank is liable to the originator for its expenses in the funds transfer and for incidental expenses and interest losses, to the extent not covered by Subsection (a) of this section, resulting from the improper execution. Except as provided by Subsection (c), additional damages are not recoverable.

(c)

In addition to the amounts payable under Subsections (a) and (b), damages, including consequential damages, are recoverable to the extent provided in an express written agreement of the receiving bank.

(d)

If a receiving bank fails to execute a payment order it was obliged by express agreement to execute, the receiving bank is liable to the sender for its expenses in the transaction and for incidental expenses and interest losses resulting from the failure to execute. Additional damages, including consequential damages, are recoverable to the extent provided in an express written agreement of the receiving bank, but are not otherwise recoverable.

(e)

Reasonable attorney’s fees are recoverable if demand for compensation under Subsection (a) or (b) is made and refused before an action is brought on the claim. If a claim is made for breach of an agreement under Subsection (d) and the agreement does not provide for damages, reasonable attorney’s fees are recoverable if demand for compensation under Subsection (d) of this section is made and refused before an action is brought on the claim.

(f)

Except as provided by this section, the liability of a receiving bank under Subsections (a) and (b) of this section may not be varied by agreement.
Added by Acts 1993, 73rd Leg., ch. 570, Sec. 7, eff. Sept. 1, 1993.

Source: Section 4A.305 — Liability for Late or Improper Execution or Failure to Execute Payment Order, https://statutes.­capitol.­texas.­gov/Docs/BC/htm/BC.­4A.­htm#4A.­305 (accessed Mar. 23, 2024).

4A.101
Short Title
4A.102
Subject Matter
4A.103
Payment Order--definitions
4A.104
Funds Transfer--definitions
4A.105
Other Definitions
4A.106
Time Payment Order Is Received
4A.107
Federal Reserve Regulations and Operating Circulars
4A.108
Relationship to Electronic Fund Transfer Act
4A.201
Security Procedure
4A.202
Authorized and Verified Payment Orders
4A.203
Unenforceability of Certain Verified Payment Orders
4A.204
Refund of Payment and Duty of Customer to Report with Respect to Unauthorized Payment Order
4A.205
Erroneous Payment Orders
4A.206
Transmission of Payment Order Through Funds Transfer or Other Communication System
4A.207
Misdescription of Beneficiary
4A.208
Misdescription of Intermediary Bank or Beneficiary’s Bank
4A.209
Acceptance of Payment Order
4A.210
Rejection of Payment Order
4A.211
Cancellation and Amendment of Payment Order
4A.212
Liability and Duty of Receiving Bank Regarding Unaccepted Payment Order
4A.301
Execution and Execution Date
4A.302
Obligations of Receiving Bank in Execution of Payment Order
4A.303
Erroneous Execution of Payment Order
4A.304
Duty of Sender to Report Erroneously Executed Payment Order
4A.305
Liability for Late or Improper Execution or Failure to Execute Payment Order
4A.401
Payment Date
4A.402
Obligation of Sender to Pay Receiving Bank
4A.403
Payment by Sender to Receiving Bank
4A.404
Obligation of Beneficiary’s Bank to Pay and Give Notice to Beneficiary
4A.405
Payment by Beneficiary’s Bank to Beneficiary
4A.406
Payment by Originator to Beneficiary
4A.501
Variation by Agreement and Effect of Funds Transfer System Rule
4A.502
Creditor Process Served on Receiving Bank
4A.503
Injunction or Restraining Order with Respect to Funds Transfer
4A.504
Order in Which Items and Payment Orders May Be Charged to Account
4A.505
Preclusion of Objection to Debit of Customer’s Account
4A.506
Rate of Interest
4A.507
Choice of Law

Accessed:
Mar. 23, 2024

§ 4A.305’s source at texas​.gov