Benjamin Geva


The article explores the occurrence of "final payment" in funds transfers in the form of "accountability" by a bank instructed to pay to a payee/beneficiary. Both the accountability of the drawee/payor bank in a check-collection debit-pull system and that of the beneficiary's bank in a wire-transfer credit-push system are discussed. The article further examines the relationship between "final payment" and the discharge of an obligation paid by means of the "funds transfer." It analyzes relevant provisions of Articles 3, 4, and 4A of the Uniform Commercial Code, sometimes against the background of general common law principles. The article proposes minor statutory amendments, and also points out a possible improved bank mechanism consisting of a bank check paid by means of a wire transfer. Such mechanism is designed to meet regulatory concerns, as well as to enhance speed and flexibility for a discharge in connection with a payment that is either required to coincide with the occurrence of external conditions or is otherwise time sensitive. While concluding that the various components of the U.C.C. scheme that governs the subject are fundamentally sound, the article recommends the pursuance of a law reform project leading to a statute dealing with both "finality of payment" and discharge across all categories of payment systems.

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