SB 86: "An Act relating to funds transfers under the Uniform Commercial Code; changing Alaska Rule of Civil Procedure 82; and providing for an effective date."
00SENATE BILL NO. 86 01 "An Act relating to funds transfers under the Uniform Commercial Code; 02 changing Alaska Rule of Civil Procedure 82; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 45.01.101 is amended to read: 05 Sec. 45.01.101. SHORT TITLE. AS 45.01 - AS 45.09 and AS 45.14 06 [AS 45.01.101 - AS 45.09.507 SHALL BE KNOWN AND] may be cited as the 07 Uniform Commercial Code. 08 * Sec. 2. AS 45.01.102 is amended to read: 09 Sec. 45.01.102. PURPOSES; RULES OF CONSTRUCTION; VARIATION 10 BY AGREEMENT. (a) The code [AS 45.01 - AS 45.09] shall be liberally construed 11 and applied to promote the underlying purposes and policies. 12 (b) Underlying purposes and policies of the code [AS 45.01 - AS 45.09] are: 13 (1) to simplify, clarify, and modernize the law governing commercial 14 transactions; (2) to permit the continued expansion of commercial
01 practices 02 through custom, usage, and agreement of the parties; 03 (3) to make uniform the law among the various jurisdictions. 04 (c) The effect of provisions of the code [AS 45.01 - AS 45.09] may be varied 05 by agreement, except as otherwise provided in the code [AS 45.01 - AS 45.09] and 06 except that the obligations of good faith, diligence, reasonableness, and care prescribed 07 by the code [AS 45.01 - AS 45.09] may not be disclaimed by agreement, but the 08 parties may by agreement determine the standards by which the performance of the 09 obligations is to be measured if such standards are not manifestly unreasonable. 10 (d) The presence in certain provisions of the code [AS 45.01 - AS 45.09] of 11 the words "unless otherwise agreed" or words of similar import does not imply that the 12 effect of other provisions may not be varied by agreement under (c) of this section. 13 (e) In the code [AS 45.01 - AS 45.09], unless the context otherwise requires, 14 (1) words in the singular number include the plural, and in the plural 15 include the singular; 16 (2) words of the masculine gender include the feminine and the neuter, 17 and when the sense so indicates words of the neuter gender may refer to any gender. 18 * Sec. 3. AS 45.01.103 is amended to read: 19 Sec. 45.01.103. SUPPLEMENTARY GENERAL PRINCIPLES OF LAW 20 APPLICABLE. Unless displaced by the particular provisions of the code [AS 45.01 - 21 AS 45.09], the principles of law and equity, including the law merchant and the law 22 relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, 23 duress, coercion, mistake, bankruptcy, or other validating or invalidating cause, 24 supplement the provisions of the code [AS 45.01 - AS 45.09]. 25 * Sec. 4. AS 45.01.105 is amended to read: 26 Sec. 45.01.105. TERRITORIAL APPLICATION OF THE ACT; PARTIES' 27 POWER TO CHOOSE APPLICABLE LAW. (a) Except as provided in this section, 28 when a transaction bears a reasonable relation to this state and also to another state or 29 nation, the parties may agree that the law either of this state or of the other state or 30 nation shall govern their rights and duties. Failing this agreement, the code applies 31 [AS 45.01 - AS 45.09 APPLY] to transactions bearing an appropriate relation to this
01 state. 02 (b) Where one of the following provisions of the code [AS 45.01 - AS 45.09] 03 specifies the applicable law, that provision governs and a contrary agreement is 04 effective only to the extent permitted by the law, including the conflict of laws rules, 05 so specified: 06 (1) rights [RIGHTS] of creditors against sold goods (AS 45.02.402); 07 (2) applicability [APPLICABILITY] of the chapter [ARTICLE] on 08 bank deposits and collections (AS 45.04.102); 09 (3) bulk transfers subject to the chapter [ARTICLE] on bulk transfers; 10 (4) applicability [(AS 45.06.102) APPLICABILITY] of the chapter 11 [ARTICLE] on investment securities (AS 45.08.106); 12 (5) perfection [PERFECTION] provisions of the chapter [ARTICLE] 13 on secured transactions (AS 45.09.103); 14 (6) AS 45.14, the chapter on funds transfers. 15 * Sec. 5. AS 45.01.106 is amended to read: 16 Sec. 45.01.106. REMEDIES TO BE LIBERALLY ADMINISTERED. (a) 17 The remedies provided by the code [AS 45.01 - AS 45.09] shall be liberally 18 administered to the end that the aggrieved party may be put in as good a position as 19 if the other party had fully performed, but neither consequential or special nor penal 20 damages may be had except as specifically provided in the code [AS 45.01 - 21 AS 45.09] or by other rule of law. 22 (b) A right or obligation declared by the code [AS 45.01 - AS 45.09] is 23 enforceable by action unless the provision declaring it specifies a different and limited 24 effect. 25 * Sec. 6. AS 45.01.108 is amended to read: 26 Sec. 45.01.108. SEVERABILITY. If a provision or clause of the code 27 [AS 45.01 - AS 45.09] or application of the clause or provision to a person or 28 circumstances is held invalid, the invalidity does not affect other provisions or 29 applications of the code [AS 45.01 - AS 45.09] that can be given effect without the 30 invalid provision or application, and to this end the provisions of the code [AS 45.01 31 - AS 45.09] are severable.
01 * Sec. 7. AS 45.01.109 is amended to read: 02 Sec. 45.01.109. SECTION CAPTIONS. Notwithstanding AS 01.05.006, 03 section headings [SECTION CAPTIONS] are parts of the code [AS 45.01 - 04 AS 45.09]. 05 * Sec. 8. AS 45.01.201 is amended to read: 06 Sec. 45.01.201. GENERAL DEFINITIONS. Subject to additional definitions 07 contained in the subsequent chapters [ARTICLES] of the code [AS 45.01 - AS 45.09] 08 that are applicable to specific chapters [ARTICLES] or sections, and unless the 09 context otherwise requires, in the code [AS 45.01 - AS 45.09], 10 (1) "action" in the sense of a judicial proceeding includes recoupment, 11 counterclaim, setoff, suit in equity, and any other proceedings in which rights are 12 determined; 13 (2) "aggrieved party" means a party entitled to resort to a remedy; 14 (3) "agreement" means the bargain of the parties in fact as found in 15 their language or by implication from other circumstances including course of dealing 16 or usage of trade or course of performance as provided in the code [AS 45.01 - 17 AS 45.09] (AS 45.01.205 and AS 45.02.208); whether or not an agreement has legal 18 consequences is determined by the provisions of the code [AS 45.01 - AS 45.09], if 19 applicable; otherwise by the law of contracts (AS 45.01.103) (compare "contract" 20 [COMPARE "CONTRACT"]); 21 (4) "bank" means a person engaged in the business of banking; 22 (5) "bearer" means the person in possession of an instrument, document 23 of title, or certificated security payable to bearer or endorsed in blank; 24 (6) "bill of lading" means a document evidencing the receipt of goods 25 for shipment issued by a person engaged in the business of transporting or forwarding 26 goods, and includes an airbill; "airbill" means a document serving for air transportation 27 as a bill of lading does for marine or rail transportation, and includes an air 28 consignment note or air waybill; 29 (7) "branch" includes a separately incorporated foreign branch of a 30 bank; 31 (8) "burden of establishing" a fact means the burden of persuading the
01 triers of fact that the existence of the fact is more probable than its nonexistence; 02 (9) "buyer in ordinary course of business" means a person who, in good 03 faith and without knowledge that the sale to that person is in violation of the 04 ownership rights or security interest of a third party in the goods, buys in ordinary 05 course from a person in the business of selling goods of that kind but does not include 06 a pawnbroker; all persons who sell minerals or the like, [(] including oil and gas, [)] 07 at wellhead or minehead are considered to be persons in the business of selling goods 08 of that kind; "buying" may be for cash or by exchange of other property or on secured 09 or unsecured credit and includes receiving goods or documents of title under a 10 pre-existing contract for sale but does not include a transfer in bulk or as security for 11 or in total or partial satisfaction of a money debt; 12 (10) "code" means AS 45.01 - AS 45.09 and AS 45.14 (the Uniform 13 Commercial Code); 14 (11) "conspicuous": a term or clause is conspicuous when it is so 15 written that a reasonable person against whom it is to operate ought to have noticed 16 it; a printed heading in capitals (as: NONNEGOTIABLE BILL OF LADING) is 17 conspicuous; language in the body of a form is "conspicuous" if it is in larger or other 18 contrasting type or color; but in a telegram any stated term is "conspicuous"; whether 19 a term or clause is "conspicuous" or not is for decision by the court; 20 (12) [(11)] "contract" means the total legal obligation that results from 21 the parties' agreement as affected by the code [AS 45.01 - AS 45.09] and any other 22 applicable rules of law (compare "agreement" [COMPARE "AGREEMENT"]); 23 (13) [(12)] "creditor" includes a general creditor, a secured creditor, a 24 lien creditor, and any representative of creditors, including an assignee for the benefit 25 of creditors, a trustee in bankruptcy, a receiver in equity, and an executor or 26 administrator of an insolvent debtor's or assignor's estate; 27 (14) [(13)] "defendant" includes a person in the position of defendant 28 in a cross action or counterclaim; 29 (15) [(14)] "delivery" with respect to instruments, documents of title, 30 chattel paper, or certificated securities means voluntary transfer of possession; 31 (16) [(15)] "document of title" includes bill of lading, dock warrant,
01 dock receipt, warehouse receipt or order for the delivery of goods, and also any other 02 document which in the regular course of business or financing is treated as adequately 03 evidencing that the person in possession of it is entitled to receive, hold, and dispose 04 of the document and the goods it covers; to be a document of title a document must 05 purport to be issued by or addressed to a bailee and purport to cover goods in the 06 bailee's possession which are either identified or are fungible portions of an identified 07 mass; 08 (17) [(16)] "fault" means wrongful act, omission, or breach; 09 (18) [(17)] "fungible" with respect to goods or securities means goods 10 or securities of which any unit is, by nature or usage of trade, the equivalent of any 11 other like unit; goods that are not fungible shall be deemed fungible for the purposes 12 of the code [AS 45.01 - AS 45.09] to the extent that under a particular agreement or 13 document unlike units are treated as equivalents; 14 (19) [(18)] "genuine" means free of forgery or counterfeiting; 15 (20) [(19)] "good faith" means honesty in fact in the conduct or 16 transaction concerned; 17 (21) [(20)] "holder" means a person who is in possession of a document 18 of title or an instrument or a certificated investment security drawn, issued, or endorsed 19 to the person or to the order of the person or to bearer or in blank; 20 (22) [(21)] to "honor" is to pay or to accept and pay or, where a credit 21 so engages, to purchase or discount a draft complying with the terms of the credit; 22 (23) [(22)] "insolvency proceedings" includes any assignment for the 23 benefit of creditors or other proceedings intended to liquidate or rehabilitate the estate 24 of the person involved; 25 (24) [(23)] a person is "insolvent" who either has ceased to pay the 26 person's debts in the ordinary course of business or cannot pay the person's debts as 27 they become due or is insolvent within the meaning of the federal bankruptcy law; 28 (25) [(24)] "money" means a medium of exchange authorized or 29 adopted by a domestic or foreign government as a part of its currency; 30 (26) [(25)] a person has "notice" of a fact when (A) the person has 31 actual knowledge of it; (B) the person has received a notice or notification of it; or (C)
01 from all the facts and circumstances known to the person at the time in question the 02 person has reason to know that it exists; a person "knows" or has "knowledge" of a 03 fact when the person has actual knowledge of it; "discover" or "learn" or a word or 04 phrase of similar import refers to knowledge rather than to reason to know; the time 05 and circumstances under which a notice or notification may cease to be effective are 06 not determined by the code [AS 45.01 - AS 45.09]; 07 (27) [(26)] a person "notifies" or "gives" a notice or notification to 08 another by taking such steps as may be reasonably required to inform the other in 09 ordinary course whether or not such other actually comes to know of it; a person 10 "receives" a notice or notification when 11 (A) it comes to the person's attention; or 12 (B) it is duly delivered at the place of business through which 13 the contract was made or at any other place held out by the person as the place 14 for receipt of the communications; 15 (28) [(27)] notice, knowledge, or a notice or notification received by 16 an organization is effective for a particular transaction from the time when it is brought 17 to the attention of the individual conducting that transaction, and in any event from the 18 time when it would have been brought to that person's attention if the organization had 19 exercised due diligence; 20 (29) [(28)] "organization" includes a corporation, government or 21 governmental subdivision or agency, business trust, estate, trust, partnership or 22 association, two or more persons having a joint or common interest, or any other legal 23 or commercial entity; 24 (30) [(29)] "party," as distinct from "third party," means a person who 25 has engaged in a transaction or made an agreement within this chapter; 26 (31) [(30)] "person" includes an individual or an organization (See 27 AS 45.01.102); 28 (32) [(31)] "presumption" or "presumed" means that the trier of fact 29 must find the existence of the fact presumed unless evidence is introduced which 30 would support a finding of its nonexistence; 31 (33) [(32)] "purchase" includes taking by sale, discount, negotiation,
01 mortgage, pledge, lien, issue or re-issue, gift, or any other voluntary transaction 02 creating an interest in property; 03 (34) [(33)] "purchaser" means a person who takes by purchase; 04 (35) [(34)] "remedy" means any remedial right to which an aggrieved 05 party is entitled with or without resort to a tribunal; 06 (36) [(35)] "representative" includes an agent, an officer of a 07 corporation or association, and a trustee, executor, or administrator of an estate, or any 08 other person empowered to act for another; 09 (37) [(36)] "rights" includes remedies; 10 (38) [(37)] "security interest" means an interest in personal property or 11 fixtures that [WHICH] secures payment or performance of an obligation; the retention 12 or reservation of title by a seller of goods notwithstanding shipment or delivery to the 13 buyer (AS 45.02.401) is limited in effect to a reservation of a "security interest"; the 14 term also includes an interest of a buyer of accounts or chattel paper that [WHICH] 15 is subject to AS 45.09; the special property interest of a buyer of goods on 16 identification of the goods to a contract for sale under AS 45.02.401 is not a "security 17 interest," but a buyer may also acquire a "security interest" by complying with 18 AS 45.09; unless a lease or consignment is intended as security, reservation of title 19 under the lease or consignment is not a "security interest," but a consignment is in any 20 event subject to the provisions on consignment sales (AS 45.02.326); whether a lease 21 is intended as security is to be determined by the facts of each case; however, 22 (A) the inclusion of an option to purchase does not of itself 23 make the lease one intended for security, and 24 (B) an agreement that upon compliance with the terms of the 25 lease the lessee shall become or has the option to become the owner of the 26 property for no additional consideration or for a nominal consideration does 27 make the lease one intended for security; 28 (39) [(38)] "send" in connection with writing or notice means to deposit 29 in the mail, or deliver for transmission by another usual means of communication, with 30 postage or cost of transmission provided for and properly addressed and, in the case 31 of an instrument, to an address specified on it or otherwise agreed, or if there is none
01 to an address reasonable under the circumstances; the receipt of a writing or notice 02 within the time at which it would have arrived if properly sent has the effect of a 03 proper sending; 04 (40) [(39)] "signed" includes a symbol executed or adopted by a party 05 with present intention to authenticate a writing; 06 (41) [(40)] "surety" includes guarantor; 07 (42) [(41)] "telegram" includes a message transmitted by radio, teletype, 08 cable, a mechanical method of transmission, or the like; 09 (43) [(42)] "term" means that portion of an agreement which relates to 10 a particular matter; 11 (44) [(43)] "unauthorized" signature or endorsement means one made 12 without actual, implied, or apparent authority, and includes a forgery; 13 (45) [(44)] "value": except as otherwise provided with respect to 14 negotiable instruments and bank collections (AS 45.03.303, AS 45.04.208, and 15 AS 45.04.209), a person gives "value" for rights if the person acquires them 16 (A) in return for a binding commitment to extend credit or for 17 the extension of immediately available credit whether or not drawn upon and 18 whether or not a charge-back is provided for in the event of difficulties in 19 collection; 20 (B) as security for or in total or partial satisfaction of a 21 pre-existing claim; 22 (C) by accepting delivery under a pre-existing contract for 23 purchase; or 24 (D) generally, in return for a consideration sufficient to support 25 a simple contract; 26 (46) [(45)] "warehouse receipt" means a receipt issued by a person 27 engaged in the business of storing goods for hire; 28 (47) [(46)] "written" or "writing" includes printing, typewriting, or any 29 other intentional reduction to tangible form. 30 * Sec. 9. AS 45.01.204(a) is amended to read: 31 (a) Where the code [AS 45.01 - AS 45.09] requires an action to be taken
01 within a reasonable time, a time which is not manifestly unreasonable may be fixed 02 by agreement. 03 * Sec. 10. AS 45.02.511(c) is amended to read: 04 (c) Subject to the provisions of the code [AS 45.01 - AS 45.09] on the effect 05 of an instrument on an obligation (AS 45.03.802), payment by check is conditional and 06 is defeated as between the parties by dishonor of the check on due presentment. 07 * Sec. 11. AS 45.09.408 is amended to read: 08 Sec. 45.09.408. FINANCING STATEMENTS COVERING CONSIGNED OR 09 LEASED GOODS. A consignor or lessor of goods may file a financing statement 10 using the terms "consignor", "consignee", "lessor", "lessee", or the like instead of the 11 terms specified in AS 45.09.402. The provisions of AS 45.09.401 - 45.09.408 apply 12 as appropriate to the financing statement, but its filing may not of itself be a factor in 13 determining whether or not the consignment or lease is intended as security as defined 14 in AS 45.01.201 [(AS 45.01.201(37))]. However, if it is determined for other reasons 15 that the consignment or lease is so intended, a security interest of the consignor or 16 lessor which attaches to the consigned or leased goods is perfected by the filing. 17 * Sec. 12. AS 45 is amended by adding a new chapter to read: 18 CHAPTER 14. FUNDS TRANSFERS. 19 ARTICLE 1. SUBJECT MATTER AND DEFINITIONS. 20 Sec. 45.14.101. SHORT TITLE. This chapter may be cited as Uniform 21 Commercial Code - Funds Transfers. 22 Sec. 45.14.102. SUBJECT MATTER. Except as otherwise provided in 23 AS 45.14.108, this chapter applies to funds transfers defined in AS 45.14.104. 24 Sec. 45.14.103. PAYMENT ORDER; DEFINITIONS. (a) In this chapter, 25 (1) "payment order" means an instruction of a sender to a receiving 26 bank, transmitted orally, electronically, or in writing, to pay, or to cause another bank 27 to pay, a fixed or determinable amount of money to a beneficiary if 28 (A) the instruction does not state a condition to payment to the 29 beneficiary other than time of payment; 30 (B) the receiving bank is to be reimbursed by debiting an 31 account of, or otherwise receiving payment from, the sender; and
01 (C) the instruction is transmitted by the sender directly to the 02 receiving bank or to an agent, funds-transfer system, or communication system 03 for transmittal to the receiving bank; 04 (2) "beneficiary" means the person to be paid by the beneficiary's bank; 05 (3) "beneficiary's bank" means the bank that is identified in a payment 06 order in which an account of the beneficiary is to be credited under an order, or that 07 otherwise is to make payment to the beneficiary if the order does not provide for 08 payment to an account; 09 (4) "receiving bank" means the bank to which the sender's instruction 10 is addressed; 11 (5) "sender" means the person giving the instruction to the receiving 12 bank. 13 (b) If an instruction complying with (a)(1) of this section is to make more than 14 one payment to a beneficiary, the instruction is a separate payment order with respect 15 to each payment. 16 (c) A payment order is issued when it is sent to the receiving bank. 17 Sec. 45.14.104. FUNDS TRANSFER; DEFINITIONS. In this chapter, 18 (1) "funds transfer" means the series of transactions, beginning with the 19 originator's payment order, made for the purpose of making payment to the beneficiary 20 of the order; the term includes any payment order issued by the originator's bank or 21 an intermediary bank intended to carry out the originator's payment order; a funds 22 transfer is completed by acceptance by the beneficiary's bank of a payment order for 23 the benefit of the beneficiary of the originator's payment order; 24 (2) "intermediary bank" means a receiving bank other than the 25 originator's bank or the beneficiary's bank; 26 (3) "originator" means the sender of the first payment order in a funds 27 transfer; 28 (4) "originator's bank" means 29 (A) the receiving bank to which the payment order of the 30 originator is issued if the originator is not a bank; or 31 (B) the originator if the originator is a bank.
01 Sec. 45.14.105. OTHER DEFINITIONS. (a) In this chapter, 02 (1) "authorized account" means a deposit account of a customer in a 03 bank designated by the customer as a source of payment of payment orders issued by 04 the customer to the bank; if a customer does not so designate an account, any account 05 of the customer is an authorized account if payment of a payment order from that 06 account is not inconsistent with a restriction on the use of that account; 07 (2) "bank" means a person engaged in the business of banking and 08 includes a savings bank, savings and loan association, credit union, and trust company; 09 a branch or separate office of a bank is a separate bank for purposes of this chapter; 10 (3) "customer" means a person, including a bank, having an account 11 with a bank or from whom a bank has agreed to receive payment orders; 12 (4) "funds-transfer business day" of a receiving bank means the part of 13 a day during which the receiving bank is open for the receipt, processing, and 14 transmittal of payment orders and cancellations and amendments of payment orders; 15 (5) "funds-transfer system" means a wire transfer network, automated 16 clearinghouse, or other communication system of a clearinghouse or other association 17 of banks through which a payment order by a bank may be transmitted to the bank to 18 which the order is addressed; 19 (6) "good faith" means honesty in fact and the observance of reasonable 20 commercial standards of fair dealing; 21 (7) "prove" with respect to a fact means to meet the burden of 22 establishing the fact; "burden of establishing" has the meaning given in AS 45.01.201. 23 (b) Other definitions applying to this chapter and the sections in which they 24 appear are 25 (1) "acceptance" in AS 45.14.209; 26 (2) "executed" in AS 45.14.301; 27 (3) "execution date" in AS 45.14.301; 28 (4) "funds-transfer system rule" in AS 45.14.501; 29 (5) "payment by beneficiary's bank to beneficiary" in AS 45.14.405; 30 (6) "payment by originator to beneficiary" in AS 45.14.406; 31 (7) "payment by sender to receiving bank" in AS 45.14.403;
01 (8) "payment date" in AS 45.14.401; 02 (9) "security procedure" in AS 45.14.201. 03 (c) The following definitions in AS 45.04.104 apply to this chapter: 04 (1) "clearinghouse"; 05 (2) "item"; 06 (3) "suspends payments". 07 (d) In addition, AS 45.01 contains general definitions and principles of 08 construction and interpretation applicable throughout this chapter. 09 Sec. 45.14.106. TIME PAYMENT ORDER IS RECEIVED. (a) The time of 10 receipt of a payment order or communication canceling or amending a payment order 11 is determined by the rules applicable to receipt of a notice stated in AS 45.01.201(27). 12 A receiving bank may fix a cut-off time or times on a funds-transfer business day for 13 the receipt and processing of payment orders and communications canceling or 14 amending payment orders. Different cut-off times may apply to payment orders, 15 cancellations, or amendments, or to different categories of payment orders, 16 cancellations, or amendments. A cut-off time may apply to senders generally or 17 different cut-off times may apply to different senders or categories of payment orders. 18 If a payment order or communication canceling or amending a payment order is 19 received after the close of a funds-transfer business day or after the appropriate cut-off 20 time on a funds-transfer business day, the receiving bank may treat the payment order 21 or communication as received at the opening of the next funds-transfer business day. 22 (b) If this chapter refers to an execution date or payment date or states a day 23 on which a receiving bank is required to take action, and the date or day does not fall 24 on a funds-transfer business day, the next day that is a funds-transfer business day is 25 treated as the date or day stated, unless the contrary is stated in this chapter. 26 Sec. 45.14.107. FEDERAL RESERVE REGULATIONS AND OPERATING 27 CIRCULARS. Regulations of the Board of Governors of the Federal Reserve System 28 and operating circulars of the federal reserve banks supersede an inconsistent provision 29 of this chapter to the extent of the inconsistency. 30 Sec. 45.14.108. EXCLUSION OF CONSUMER TRANSACTIONS 31 GOVERNED BY FEDERAL LAW. This chapter does not apply to a funds transfer
01 if a part of the funds transfer is governed by 15 U.S.C. 1693 - 1693r (Electronic Fund 02 Transfer Act of 1978) as amended. 03 ARTICLE 2. ISSUE AND ACCEPTANCE OF PAYMENT ORDER. 04 Sec. 45.14.201. SECURITY PROCEDURE. (a) In this chapter, "security 05 procedure" means a procedure established by agreement of a customer and a receiving 06 bank for the purpose of 07 (1) verifying that a payment order or communication amending or 08 canceling a payment order is that of the customer; or 09 (2) detecting error in the transmission or the content of the payment 10 order or communication. 11 (b) A security procedure may require the use of algorithms or other codes, 12 identifying words or numbers, encryption, call-back procedures, or similar security 13 devices. Comparison of a signature on a payment order or communication with an 14 authorized specimen signature of the customer is not by itself a security procedure. 15 Sec. 45.14.202. AUTHORIZED AND VERIFIED PAYMENT ORDERS. (a) 16 A payment order received by the receiving bank is the authorized order of the person 17 identified as sender if that person authorized the order or is otherwise bound by it 18 under the law of agency. 19 (b) If a bank and its customer have agreed that the authenticity of payment 20 orders issued to the bank in the name of the customer as sender will be verified under 21 a security procedure, a payment order received by the receiving bank is effective as 22 the order of the customer, whether or not authorized, if 23 (1) the security procedure is a commercially reasonable method of 24 providing security against unauthorized payment orders; and 25 (2) the bank proves that it accepted the payment order in good faith and 26 in compliance with the security procedure and any written agreement or instruction of 27 the customer restricting acceptance of payment orders issued in the name of the 28 customer; the bank is not required to follow an instruction that violates a written 29 agreement with the customer or notice of which is not received at a time and in a 30 manner affording the bank a reasonable opportunity to act on it before the payment 31 order is accepted.
01 (c) Commercial reasonableness of a security procedure is a question of law to 02 be determined by considering the wishes of the customer expressed to the bank, the 03 circumstances of the customer known to the bank, including the size, type, and 04 frequency of payment orders normally issued by the customer to the bank, alternative 05 security procedures offered to the customer, and security procedures in general use by 06 customers and receiving banks similarly situated. A security procedure is considered 07 to be commercially reasonable if 08 (1) the security procedure was chosen by the customer after the bank 09 offered, and the customer refused, a security procedure that was commercially 10 reasonable for that customer; and 11 (2) the customer expressly agreed in writing to be bound by a payment 12 order, whether or not authorized, issued in its name and accepted by the bank in 13 compliance with the security procedure chosen by the customer. 14 (d) This section applies to amendments and cancellations of payment orders 15 to the same extent that it applies to payment orders. 16 (e) Except as provided in this section and in AS 45.14.203(a)(1), rights and 17 obligations arising under this section or AS 45.14.203 may not be varied by agreement. 18 (f) In this chapter, "sender" includes the customer in whose name a payment 19 order is issued if the order is the authorized order of the customer under (a) of this 20 section, or it is effective as the order of the customer under (b) of this section. 21 Sec. 45.14.203. UNENFORCEABILITY OF CERTAIN VERIFIED 22 PAYMENT ORDERS. (a) If an accepted payment order is not, under 23 AS 45.14.202(a), an authorized order of a customer identified as sender, but is 24 effective as an order of the customer under AS 45.14.202(b), the following rules apply: 25 (1) by express written agreement, the receiving bank may limit the 26 extent to which it is entitled to enforce or retain payment of the payment order; 27 (2) the receiving bank is not entitled to enforce or retain payment of 28 the payment order if the customer proves that the order was not caused, directly or 29 indirectly, by a person 30 (A) entrusted at any time with duties to act for the customer 31 with respect to payment orders or the security procedure; or
01 (B) who obtained access to transmitting facilities of the 02 customer or who obtained, from a source controlled by the customer and 03 without authority of the receiving bank, information facilitating breach of the 04 security procedure, regardless of how the information was obtained or whether 05 the customer was at fault; in this subparagraph, "information" includes any 06 access device, computer software, or the like. 07 (b) This section applies to amendments of payment orders to the same extent 08 that it applies to payment orders. 09 Sec. 45.14.204. REFUND OF PAYMENT AND DUTY OF CUSTOMER TO 10 REPORT WITH RESPECT TO UNAUTHORIZED PAYMENT ORDER. (a) If a 11 receiving bank accepts a payment order issued in the name of its customer as sender 12 and if the payment order is not authorized and not effective as the order of the 13 customer under AS 45.14.202, or not enforceable in whole or in part against the 14 customer under AS 45.14.203, the bank shall refund payment of the payment order 15 received from the customer to the extent that the bank is not entitled to enforce 16 payment and shall pay interest on the refundable amount calculated from the date the 17 bank received payment to the date of the refund. However, the customer is not 18 entitled to interest from the bank on the amount to be refunded if the customer fails 19 to exercise ordinary care to determine that the order was not authorized by the 20 customer and to notify the bank of the relevant facts within a reasonable time not 21 exceeding 90 days after the date the customer received notification from the bank that 22 the order was accepted or that the customer's account was debited with respect to the 23 order. The bank is not entitled to recovery from the customer on account of a failure 24 by the customer to give notification as stated in this section. 25 (b) Reasonable time under (a) of this section may be fixed by agreement as 26 stated in AS 45.01.204(a), but the obligation of a receiving bank to refund payment 27 as stated in (a) of this section may not otherwise be varied by agreement. 28 Sec. 45.14.205. ERRONEOUS PAYMENT ORDERS. (a) If an accepted 29 payment order was transmitted under a security procedure for the detection of error 30 and the payment order was an erroneous payment order, the following rules apply: 31 (1) if the sender proves that the sender or a person acting on behalf of
01 the sender under AS 45.14.206 complied with the security procedure and that the error 02 would have been detected if the receiving bank had also complied, the sender is not 03 obliged to pay the order to the extent stated in (2) and (3) of this subsection; 04 (2) if the funds transfer is completed on the basis of an erroneous 05 payment order described in (d)(1) or (3) of this section, the sender is not obliged to 06 pay the order and the receiving bank is entitled to recover from the beneficiary any 07 amount paid to the beneficiary to the extent allowed by the law governing mistake and 08 restitution; 09 (3) if the funds transfer is completed on the basis of an erroneous 10 payment order described in (d)(2) of this section, the sender is not obliged to pay the 11 order to the extent the amount received by the beneficiary is greater than the amount 12 intended by the sender; in that case, the receiving bank is entitled to recover from the 13 beneficiary the excess amount received to the extent allowed by the law governing 14 mistake and restitution. 15 (b) If the sender of an erroneous payment order is not obliged to pay all or 16 part of the order, and if the sender receives notification from the receiving bank that 17 the order was accepted by the bank or that the sender's account was debited with 18 respect to the order, the sender has a duty to exercise ordinary care, on the basis of 19 information available to the sender, to discover the error with respect to the order and 20 to advise the bank of the relevant facts within a reasonable time, not exceeding 90 21 days, after the bank's notification was received by the sender. If the bank proves that 22 the sender failed to perform that duty, the sender is liable to the bank for the loss the 23 bank proves it incurred as a result of the failure, but the liability of the sender may not 24 exceed the amount of the sender's order. 25 (c) This section applies to amendments to payment orders to the same extent 26 it applies to payment orders. 27 (d) In this section, "erroneous payment order" means a payment order that 28 (1) erroneously instructed payment to a beneficiary not intended by the 29 sender; 30 (2) erroneously instructed payment in an amount greater than the 31 amount intended by the sender; or
01 (3) was an erroneously transmitted duplicate of a payment order 02 previously sent by the sender. 03 Sec. 45.14.206. TRANSMISSION OF PAYMENT ORDER THROUGH 04 FUNDS-TRANSFER OR OTHER COMMUNICATION SYSTEM. (a) If a payment 05 order addressed to a receiving bank is transmitted to a funds-transfer system or other 06 third-party communication system for transmittal to the bank, the system is considered 07 to be an agent of the sender for the purpose of transmitting the payment order to the 08 bank. If there is a discrepancy between the terms of the payment order transmitted to 09 the system and the terms of the payment order transmitted by the system to the bank, 10 the terms of the payment order of the sender are those transmitted by the system. This 11 section does not apply to a funds-transfer system of the federal reserve banks. 12 (b) This section applies to cancellations and amendments of payment orders 13 to the same extent that it applies to payment orders. 14 Sec. 45.14.207. MISDESCRIPTION OF BENEFICIARY. (a) Subject to (b) 15 of this section, if, in a payment order received by the beneficiary's bank, the name, 16 bank account number, or other identification of the beneficiary refers to a nonexistent 17 or unidentifiable person or account, no person has rights as a beneficiary of the order, 18 and acceptance of the order cannot occur. 19 (b) If a payment order received by the beneficiary's bank identifies the 20 beneficiary both by name and by an identifying or bank account number and the name 21 and number identify different persons, the following rules apply: 22 (1) except as otherwise provided in (c) of this section, if the 23 beneficiary's bank does not know that the name and number refer to different persons, 24 it may rely on the number as the proper identification of the beneficiary of the order; 25 the beneficiary's bank does not need to determine whether the name and number refer 26 to the same person; 27 (2) if the beneficiary's bank pays the person identified by name or 28 knows that the name and number identify different persons, no person has rights as 29 beneficiary except the person paid by the beneficiary's bank if that person was entitled 30 to receive payment from the originator of the funds transfer; if no person has rights 31 as beneficiary, acceptance of the order cannot occur.
01 (c) If a payment order described in (b) of this section is accepted, if the 02 originator's payment order described the beneficiary inconsistently by name and 03 number, and if the beneficiary's bank pays the person identified by number as 04 permitted by (b)(1) of this section, the following rules apply: 05 (1) if the originator is a bank, the originator is obliged to pay its order; 06 (2) if the originator is not a bank and proves that the person identified 07 by number was not entitled to receive payment from the originator, the originator is 08 not obliged to pay its order unless the originator's bank proves that the originator, 09 before acceptance of the originator's order, had notice that payment of a payment order 10 issued by the originator might be made by the beneficiary's bank on the basis of an 11 identifying or bank account number even if it identifies a person different from the 12 named beneficiary; proof of notice may be made by any admissible evidence; the 13 originator's bank satisfies the burden of proof if it proves that the originator, before 14 the payment order was accepted, signed a writing stating the information to which the 15 notice relates. 16 (d) In a case governed by (b)(1) of this section, if the beneficiary's bank 17 rightfully pays the person identified by number and that person was not entitled to 18 receive payment from the originator, the amount paid may be recovered from that 19 person to the extent allowed by the law governing mistake and restitution as follows: 20 (1) if the originator is obliged to pay its payment order as stated in (c) 21 of this section, the originator has the right to recover; 22 (2) if the originator is not a bank and is not obliged to pay its payment 23 order, the originator's bank has the right to recover. 24 Sec. 45.14.208. MISDESCRIPTION OF INTERMEDIARY BANK OR 25 BENEFICIARY'S BANK. (a) The following rules in this subsection apply to a 26 payment order identifying an intermediary bank or the beneficiary's bank only by an 27 identifying number: 28 (1) the receiving bank may rely on the number as the proper 29 identification of the intermediary or beneficiary's bank and need not determine whether 30 the number identifies a bank; 31 (2) the sender is obliged to compensate the receiving bank for any loss
01 and expenses incurred by the receiving bank as a result of its reliance on the number 02 in executing or attempting to execute the order. 03 (b) The following rules in this subsection apply to a payment order identifying 04 an intermediary bank or the beneficiary's bank both by name and an identifying 05 number if the name and number identify different persons: 06 (1) if the sender is a bank, the receiving bank may rely on the number 07 as the proper identification of the intermediary or beneficiary's bank if the receiving 08 bank, when it executes the sender's order, does not know that the name and number 09 identify different persons; the receiving bank does not need to determine whether the 10 name and number refer to the same person or whether the number refers to a bank; the 11 sender is obliged to compensate the receiving bank for any loss and expenses incurred 12 by the receiving bank as a result of its reliance on the number in executing or 13 attempting to execute the order; 14 (2) if the sender is not a bank and the receiving bank proves that the 15 sender, before the payment order was accepted, had notice that the receiving bank 16 might rely on the number as the proper identification of the intermediary or 17 beneficiary's bank even if it identifies a person different from the bank identified by 18 name, the rights and obligations of the sender and the receiving bank are governed by 19 (b)(1) of this section, as though the sender were a bank; proof of notice may be made 20 by any admissible evidence; the receiving bank satisfies the burden of proof if it 21 proves that the sender, before the payment order was accepted, signed a writing stating 22 the information to which the notice relates; 23 (3) regardless of whether the sender is a bank, the receiving bank may 24 rely on the name as the proper identification of the intermediary or beneficiary's bank 25 if the receiving bank, at the time it executes the sender's order, does not know that the 26 name and number identify different persons; the receiving bank does not need to 27 determine whether the name and number refer to the same person; 28 (4) if the receiving bank knows that the name and number identify 29 different persons, reliance on either the name or the number in executing the sender's 30 payment order is a breach of the obligation stated in AS 45.14.302(a)(1). 31 Sec. 45.14.209. ACCEPTANCE OF PAYMENT ORDER. (a) Subject to (d)
01 of this section, a receiving bank other than the beneficiary's bank accepts a payment 02 order when it executes the order. 03 (b) Subject to (c) and (d) of this section, a beneficiary's bank accepts a 04 payment order at the earliest of the following times: 05 (1) when the bank 06 (A) pays the beneficiary as stated in AS 45.14.405(a) or (b); or 07 (B) notifies the beneficiary of receipt of the order or that the 08 account of the beneficiary has been credited with respect to the order unless the 09 notice indicates that the bank is rejecting the order or that funds with respect 10 to the order may not be withdrawn or used until receipt of payment from the 11 sender of the order; 12 (2) when the bank receives payment of the entire amount of the 13 sender's order under AS 45.14.403(a)(1) or (2); or 14 (3) the opening of the next funds-transfer business day of the bank 15 following the payment date of the order if, at the opening of the next funds-transfer 16 business day, the amount of the sender's order is fully covered by a withdrawable 17 credit balance in an authorized account of the sender, or the bank has otherwise 18 received full payment from the sender, unless the order was rejected before the 19 opening of the next funds-transfer business day, is rejected within one hour after the 20 opening of the next funds-transfer business day, or, if later, is rejected one hour after 21 the opening of the next business day of the sender following the payment date; if 22 notice of rejection is received by the sender after the payment date and the authorized 23 account of the sender does not bear interest, the bank is obliged to pay interest to the 24 sender on the amount of the order for the number of days elapsing after the payment 25 date to the day the sender receives notice or learns that the order was not accepted, 26 counting that day as an elapsed day; if the withdrawable credit balance during that 27 period falls below the amount of the order, the amount of interest payable is reduced 28 accordingly. 29 (c) Acceptance of a payment order may not occur before the order is received 30 by the receiving bank. Acceptance does not occur under (b)(2) or (3) of this section 31 if the beneficiary of the payment order does not have an account with the receiving
01 bank, the account has been closed, or the receiving bank is not permitted by law to 02 receive credits for the beneficiary's account. 03 (d) A payment order issued to the originator's bank cannot be accepted until 04 the payment date if the bank is the beneficiary's bank, or the execution date if the 05 bank is not the beneficiary's bank. If the originator's bank executes the originator's 06 payment order before the execution date or pays the beneficiary of the originator's 07 payment order before the payment date and the payment order is subsequently canceled 08 under AS 45.14.211(b), the bank may recover from the beneficiary any payment 09 received to the extent allowed by the law governing mistake and restitution. 10 Sec. 45.14.210. REJECTION OF PAYMENT ORDER. (a) A payment order 11 is rejected by the receiving bank by a notice of rejection transmitted to the sender 12 orally, electronically, or in writing. A notice of rejection does not need to use 13 particular words and is sufficient if it indicates that the receiving bank is rejecting the 14 order or will not execute or pay the order. Rejection is effective when the notice is 15 given if transmission is by a means that is reasonable in the circumstances. If notice 16 of rejection is given by a means that is not reasonable, rejection is effective when the 17 notice is received. If an agreement of the sender and receiving bank establishes the 18 means to be used to reject a payment order, means 19 (1) complying with the agreement are reasonable; and 20 (2) not complying with the agreement are not reasonable unless 21 significant delay in receipt of the notice did not result from the use of the 22 noncomplying means. 23 (b) This subsection applies if a receiving bank other than the beneficiary's 24 bank fails to execute a payment order despite the existence on the execution date of 25 a withdrawable credit balance in an authorized account of the sender sufficient to cover 26 the order. If the sender does not receive notice of rejection of the order on the 27 execution date and the authorized account of the sender does not bear interest, the 28 bank is obliged to pay interest to the sender on the amount of the order for the number 29 of days elapsing after the execution date to the earlier of the day the order is canceled 30 under AS 45.14.211(e) or the day the sender receives notice or learns that the order 31 was not executed, counting the final day of the period as an elapsed day. If the
01 withdrawable credit balance during that period falls below the amount of the order, the 02 amount of interest is reduced accordingly. 03 (c) If a receiving bank suspends payments, all unaccepted payment orders 04 issued to it are considered rejected at the time the bank suspends payments. 05 (d) Acceptance of a payment order precludes a later rejection of the order. 06 Rejection of a payment order precludes a later acceptance of the order. 07 Sec. 45.14.211. CANCELLATION AND AMENDMENT OF PAYMENT 08 ORDER. (a) A communication of the sender of a payment order canceling or 09 amending the order may be transmitted to the receiving bank orally, electronically, or 10 in writing. If a security procedure is in effect between the sender and the receiving 11 bank, the communication is not effective to cancel or amend the order unless the 12 communication is verified under the security procedure or the bank agrees to the 13 cancellation or amendment. 14 (b) Subject to (a) of this section, a communication by the sender canceling or 15 amending a payment order is effective to cancel or amend the order if notice of the 16 communication is received at a time and in a manner affording the receiving bank a 17 reasonable opportunity to act on the communication before the bank accepts the 18 payment order. 19 (c) After a payment order has been accepted, cancellation or amendment of the 20 order is not effective unless the receiving bank agrees or a funds-transfer system rule 21 allows cancellation or amendment without agreement of the bank. The following rules 22 also apply: 23 (1) with respect to a payment order accepted by a receiving bank other 24 than the beneficiary's bank, cancellation or amendment is not effective unless a 25 conforming cancellation or amendment of the payment order issued by the receiving 26 bank is also made; 27 (2) with respect to a payment order accepted by the beneficiary's bank, 28 cancellation or amendment is not effective unless the order was issued in execution of 29 an unauthorized payment order, or because of a mistake by a sender in the funds 30 transfer, if the mistake resulted in the issuance of a payment order that 31 (A) is a duplicate of a payment order previously issued by the
01 sender; 02 (B) orders payment to a beneficiary not entitled to receive 03 payment from the originator; or 04 (C) orders payment in an amount greater than the amount the 05 beneficiary was entitled to receive from the originator. 06 (d) Under (c)(2) of this section, if the payment order is canceled or amended, 07 the beneficiary's bank is entitled to recover from the beneficiary any amount paid to 08 the beneficiary to the extent allowed by the law governing mistake and restitution. 09 (e) An unaccepted payment order is canceled by operation of law at the close 10 of the fifth funds-transfer business day of the receiving bank after the execution date 11 or payment date of the order. 12 (f) A canceled payment order cannot be accepted. If an accepted payment 13 order is canceled, the acceptance is nullified and no person has a right or obligation 14 based on the acceptance. Amendment of a payment order is considered to be 15 cancellation of the original order at the time of amendment and issue of a new 16 payment order in the amended form at the same time. 17 (g) Unless otherwise provided in an agreement of the parties or in a funds-transfer system rule, if the receiving 18 bank, after accepting a payment order, agrees to 19 cancellation or amendment of the order by the sender or is bound by a funds-transfer 20 system rule allowing cancellation or amendment without the banks' agreement, the 21 sender, whether or not cancellation or amendment is effective, is liable to the bank for 22 any loss and expenses, including reasonable attorney fees, incurred by the bank as a 23 result of the cancellation or amendment or attempted cancellation or amendment. 24 (h) A payment order is not revoked by the death or legal incapacity of the 25 sender unless the receiving bank knows of the death or of an adjudication of incapacity 26 by a court of competent jurisdiction and has reasonable opportunity to act before 27 acceptance of the order. 28 (i) A funds-transfer system rule is not effective to the extent that it conflicts 29 with (c)(2) or (d) of this section. 30 Sec. 45.14.212. LIABILITY AND DUTY OF RECEIVING BANK 31 REGARDING UNACCEPTED PAYMENT ORDER. If a receiving bank fails to
01 accept a payment order that it is obliged by express agreement to accept, the bank is 02 liable for breach of the agreement to the extent provided in the agreement or in this 03 chapter, but does not otherwise have a duty to accept a payment order or, before 04 acceptance, to take action, or refrain from taking action, with respect to the order 05 except as provided in this chapter or by express agreement. Liability based on 06 acceptance arises only when acceptance occurs as stated in AS 45.14.209, and liability 07 is limited to liability provided in this chapter. A receiving bank is not the agent of the 08 sender or beneficiary of the payment order it accepts, or of another party to the funds 09 transfer, and the bank does not owe a duty to a party to the funds transfer except as 10 provided in this chapter or by express agreement. 11 ARTICLE 3. EXECUTION OF SENDER'S PAYMENT ORDER 12 BY RECEIVING BANK. 13 Sec. 45.14.301. EXECUTION AND EXECUTION DATE. (a) A payment 14 order is executed by the receiving bank when it issues a payment order intended to 15 carry out the payment order received by the bank. A payment order received by the 16 beneficiary's bank can be accepted but cannot be executed. 17 (b) "Execution date" of a payment order means the day on which the receiving 18 bank may properly issue a payment order in execution of the sender's order. The 19 execution date may be determined by instruction of the sender but cannot be earlier 20 than the day the order is received and, unless otherwise determined, is the day the 21 order is received. If the sender's instruction states a payment date, the execution date 22 is the payment date or an earlier date on which execution is reasonably necessary to 23 allow payment to the beneficiary on the payment date. 24 Sec. 45.14.302. OBLIGATIONS OF RECEIVING BANK IN EXECUTION 25 OF PAYMENT ORDER. (a) Except as provided in (b) - (d) of this section, if the 26 receiving bank accepts a payment order under AS 45.14.209(a), the bank has the 27 following obligations in executing the order: 28 (1) the receiving bank is obliged to issue, on the execution date, a 29 payment order complying with the sender's order and to follow the sender's 30 instructions concerning 31 (A) an intermediary bank or funds-transfer system to be used
01 in carrying out the funds transfer; or 02 (B) the means by which payment orders are to be transmitted 03 in the funds transfer; if the originator's bank issues a payment order to an 04 intermediary bank, the originator's bank is obliged to instruct the intermediary 05 bank according to the instruction of the originator; an intermediary bank in the 06 funds transfer is similarly bound by an instruction given to it by the sender of 07 the payment order it accepts; 08 (2) if the sender's instruction states that the funds transfer is to be 09 carried out telephonically or by wire transfer or otherwise indicates that the funds 10 transfer is to be carried out by the most expeditious means, the receiving bank is 11 obliged to transmit its payment order by the most expeditious available means, and to 12 instruct an intermediary bank accordingly; if a sender's instruction states a payment 13 date, the receiving bank is obliged to transmit its payment order at a time and by 14 means reasonably necessary to allow payment to the beneficiary on the payment date 15 or as soon after that date as is feasible. 16 (b) Unless otherwise instructed, a receiving bank executing a payment order 17 may 18 (1) use any funds-transfer system if use of that system is reasonable in 19 the circumstances; and 20 (2) issue a payment order to the beneficiary's bank or to an 21 intermediary bank through which a payment order conforming to the sender's order 22 can expeditiously be issued to the beneficiary's bank if the receiving bank exercises 23 ordinary care in the selection of the intermediary bank; a receiving bank is not required 24 to follow an instruction of the sender designating a funds-transfer system to be used 25 in carrying out the funds transfer if the receiving bank, in good faith, determines that 26 it is not feasible to follow the instruction or that following the instruction would 27 unduly delay completion of the funds transfer. 28 (c) Unless (a)(2) of this section applies or the receiving bank is otherwise 29 instructed, the bank may execute a payment order by transmitting its payment order 30 by first class mail or by any means reasonable in the circumstances. If the receiving 31 bank is instructed to execute the sender's order by transmitting its payment order by
01 a particular means, the receiving bank may issue its payment order by the means stated 02 or by means as expeditious as the means stated. 03 (d) Unless instructed by the sender, 04 (1) the receiving bank may not obtain payment of its charges for 05 services and expenses in connection with the execution of the sender's order by issuing 06 a payment order in an amount equal to the amount of the sender's order less the 07 amount of the charges; and 08 (2) may not instruct a subsequent receiving bank to obtain payment of 09 its charges in the same manner. 10 Sec. 45.14.303. ERRONEOUS EXECUTION OF PAYMENT ORDER. (a) 11 If a receiving bank executes the payment order of the sender by issuing a payment 12 order in an amount greater than the amount of the sender's order, or if a receiving 13 bank issues a payment order in execution of the sender's order and then issues a 14 duplicate order, the bank is entitled to payment of the amount of the sender's order 15 under AS 45.14.402(c) if that subsection is otherwise satisfied. The bank is entitled 16 to recover from the beneficiary of the erroneous order the excess payment received to 17 the extent allowed by the law governing mistake and restitution. 18 (b) A receiving bank that executes the payment order of the sender by issuing 19 a payment order in an amount less than the amount of the sender's order is entitled to 20 payment of the amount of the sender's order under AS 45.14.402(c) if that subsection 21 is otherwise satisfied and the bank corrects its mistake by issuing an additional 22 payment order for the benefit of the beneficiary of the sender's order. If the error is 23 not corrected, the issuer of the erroneous order is entitled to receive or retain payment 24 from the sender of the order it accepted only to the extent of the amount of the 25 erroneous order. This subsection does not apply if the receiving bank executes the 26 sender's payment order by issuing a payment order in an amount less than the amount 27 of the sender's order for the purpose of obtaining payment of its charges for services 28 and expenses pursuant to instruction of the sender. 29 (c) If a receiving bank executes the payment order of the sender by issuing a 30 payment order to a beneficiary different from the beneficiary of the sender's order and 31 the funds transfer is completed on the basis of that error, the sender of the payment
01 order that was erroneously executed and all previous senders in the funds transfer are 02 not obliged to pay the payment orders they issued. The issuer of the erroneous order 03 is entitled to recover from the beneficiary of the order the payment received to the 04 extent allowed by the law governing mistake and restitution. 05 Sec. 45.14.304. DUTY OF SENDER TO REPORT ERRONEOUSLY 06 EXECUTED PAYMENT ORDER. If the sender of a payment order that is 07 erroneously executed as stated in AS 45.14.303 receives notification from the receiving 08 bank that the order was executed or that the sender's account was debited with respect 09 to the order, the sender has a duty to exercise ordinary care to determine, on the basis 10 of information available to the sender, that the order was erroneously executed and to 11 notify the bank of the relevant facts within a reasonable time not exceeding 90 days 12 after the notification from the bank was received by the sender. If the sender fails to 13 perform that duty, the bank is not obliged to pay interest on any amount refundable 14 to the sender under AS 45.14.402(d) for the period before the bank learns of the 15 execution error. The bank is not entitled to any recovery from the sender on account 16 of a failure by the sender to perform the duty stated in this section. 17 Sec. 45.14.305. LIABILITY FOR LATE OR IMPROPER EXECUTION OR 18 FAILURE TO EXECUTE PAYMENT ORDER. (a) If a funds transfer is completed 19 but execution of a payment order by the receiving bank in breach of AS 45.14.302 20 results in delay in payment to the beneficiary, the bank is obliged to pay interest to 21 either the originator or the beneficiary of the funds transfer for the period of delay 22 caused by the improper execution. Except as provided in (c) of this section, additional 23 damages are not recoverable. 24 (b) If execution of a payment order by a receiving bank in breach of 25 AS 45.14.302 results in noncompletion of the funds transfer, failure to use an 26 intermediary bank designated by the originator, or issuance of a payment order that 27 does not comply with the terms of the payment order of the originator, the bank is 28 liable to the originator for its expenses in the funds transfer and for incidental expenses 29 and interest losses, to the extent not covered by (a) of this section, resulting from the 30 improper execution. Except as provided in (c) of this section, additional damages are 31 not recoverable.
01 (c) In addition to the amounts payable under (a) and (b) of this section, 02 damages, including consequential damages, are recoverable to the extent provided in 03 an express written agreement of the receiving bank. 04 (d) If a receiving bank fails to execute a payment order it was obliged by 05 express agreement to execute, the receiving bank is liable to the sender for its expenses 06 in the transaction and for incidental expenses and interest losses resulting from the 07 failure to execute. Additional damages, including consequential damages, are 08 recoverable to the extent provided in an express written agreement of the receiving 09 bank, but are not otherwise recoverable. 10 (e) Reasonable attorney fees are recoverable if demand for compensation under 11 (a) or (b) of this section is made and refused before an action is brought on the claim. 12 If a claim is made for breach of an agreement under (d) of this section and the 13 agreement does not provide for damages, reasonable attorney fees are recoverable if 14 demand for compensation under (d) of this section is made and refused before an 15 action is brought on the claim. Recovery of attorney fees under this subsection is an 16 exception to the general provisions of Alaska Rule of Civil Procedure 82. 17 (f) Except as stated in this section, the liability of a receiving bank under (a) 18 and (b) of this section may not be varied by agreement. 19 ARTICLE 4. PAYMENT. 20 Sec. 45.14.401. PAYMENT DATE. "Payment date" of a payment order means 21 the day on which the amount of the order is payable to the beneficiary by the 22 beneficiary's bank. The payment date may be determined by instruction of the sender 23 but cannot be earlier than the day the order is received by the beneficiary's bank and, 24 unless otherwise determined, is the day the order is received by the beneficiary's bank. 25 Sec. 45.14.402. OBLIGATION OF SENDER TO PAY RECEIVING BANK. 26 (a) This section is subject to AS 45.14.205 and 45.14.207. 27 (b) With respect to a payment order issued to the beneficiary's bank, 28 acceptance of the order by the bank obliges the sender to pay the bank the amount of 29 the order, but payment is not due until the payment date of the order. 30 (c) With respect to a payment order issued to a receiving bank other than the 31 beneficiary's bank, acceptance of the order by the receiving bank obliges the sender
01 to pay the bank the amount of the sender's order. Payment by the sender is not due 02 until the execution date of the sender's order. The obligation of that sender to pay its 03 payment order is excused if the funds transfer is not completed by acceptance by the 04 beneficiary's bank of a payment order instructing payment to the beneficiary of that 05 sender's payment order. This subsection is subject to (e) of this section and to 06 AS 45.14.303. 07 (d) If the sender of a payment order pays the order and was not obliged to pay 08 all or part of the amount paid, the bank receiving payment is obliged to refund 09 payment to the extent the sender was not obliged to pay. Except as provided in 10 AS 45.14.204 and 45.14.304, interest is payable on the refundable amount from the 11 date of payment. 12 (e) If a funds transfer is not completed as stated in (c) of this section and an 13 intermediary bank is obliged to refund payment as stated in (d) of this section but is 14 unable to do so because not permitted by applicable law or because the bank suspends 15 payments, a sender in the funds transfer that executed a payment order in compliance 16 with an instruction, as stated in AS 45.14.302(a)(1), to route the funds transfer through 17 that intermediary bank is entitled to receive or retain payment from the sender of the 18 payment order that it accepted. The first sender in the funds transfer that issued an 19 instruction requiring routing through that intermediary bank is subrogated to the right 20 of the bank that paid the intermediary bank to refund as stated in (d) of this section. 21 (f) The right of the sender of a payment order to be excused from the 22 obligation to pay the order as stated in (c) of this section or to receive refund under 23 (d) of this section may not be varied by agreement. 24 Sec. 45.14.403. PAYMENT BY SENDER TO RECEIVING BANK. (a) 25 Payment of the sender's obligation under AS 45.14.402 to pay the receiving bank 26 occurs as follows: 27 (1) if the sender is a bank, payment occurs when the receiving bank 28 receives final settlement of the obligation through a federal reserve bank or through 29 a funds-transfer system; 30 (2) if the sender is a bank and the sender 31 (A) credited an account of the receiving bank with the sender;
01 or 02 (B) caused an account of the receiving bank in another bank to 03 be credited, payment occurs when the credit is withdrawn or, if not withdrawn, 04 at midnight of the day on which the credit is withdrawable and the receiving 05 bank learns of that fact; 06 (3) if the receiving bank debits an account of the sender with the 07 receiving bank, payment occurs when the debit is made to the extent that the debit is 08 covered by a withdrawable credit balance in the account. 09 (b) If the sender and receiving bank are members of a funds-transfer system 10 that nets obligations multilaterally among participants, the receiving bank receives final 11 settlement when settlement is complete in accordance with the rules of the system. 12 The obligation of the sender to pay the amount of a payment order transmitted through 13 the funds-transfer system may be satisfied, to the extent permitted by the rules of the 14 system, by setting off and applying against the sender's obligation the right of the 15 sender to receive payment from the receiving bank of the amount of any other payment 16 order transmitted to the sender by the receiving bank through the funds-transfer 17 system. The aggregate balance of obligations owed by each sender to each receiving 18 bank in the funds-transfer system may be satisfied, to the extent permitted by the rules 19 of the system, by setting off and applying against that balance the aggregate balance 20 of obligations owed to the sender by other members of the system. The aggregate 21 balance is determined after the right of setoff stated in the second sentence of this 22 subsection has been exercised. 23 (c) If two banks transmit payment orders to each other under an agreement that 24 settlement of the obligations of each bank to the other under AS 45.14.402 will be 25 made at the end of the day or other period, the total amount owed with respect to all 26 orders transmitted by one bank shall be set off against the total amount owed with 27 respect to all orders transmitted by the other bank. To the extent of the setoff, each 28 bank has made payment to the other. 29 (d) In a case not covered under (a) of this section, the time when payment of 30 the sender's obligation under AS 45.14.402(b) or (c) occurs is governed by applicable 31 principles of law that determine when an obligation is satisfied.
01 Sec. 45.14.404. OBLIGATION OF BENEFICIARY'S BANK TO PAY AND 02 GIVE NOTICE TO BENEFICIARY. (a) Subject to AS 45.14.211(f) and 45.14.405(d) 03 and (e), if a beneficiary's bank accepts a payment order, the bank is obliged to pay the 04 amount of the order to the beneficiary of the order. Payment is due on the payment 05 date of the order, but if acceptance occurs on the payment date after the close of the 06 funds-transfer business day of the bank, payment is due on the next funds-transfer 07 business day. If the bank refuses to pay after demand by the beneficiary and receipt 08 of notice of particular circumstances that will give rise to consequential damages as 09 a result of nonpayment, the beneficiary may recover damages resulting from the refusal 10 to pay to the extent that the bank had notice of the damages, unless the bank proves 11 that it did not pay because of a reasonable doubt concerning the right of the 12 beneficiary to payment. 13 (b) If a payment order accepted by the beneficiary's bank instructs payment 14 to an account of the beneficiary, the bank is obliged to notify the beneficiary of receipt 15 of the order before midnight of the next funds-transfer business day following the 16 payment date. If the payment order does not instruct payment to an account of the 17 beneficiary, the bank is required to notify the beneficiary only if notice is required by 18 the order. Notice may be given by first class mail or other means reasonable in the 19 circumstances. If the bank fails to give the required notice, the bank is obliged to pay 20 interest to the beneficiary on the amount of the payment order from the day notice 21 should have been given until the day the beneficiary learned of receipt of the payment 22 order by the bank. Other damages are not recoverable. Notwithstanding Alaska Rule 23 of Civil Procedure 82, reasonable attorney fees are also recoverable if demand for 24 interest is made and refused before an action is brought on the claim. 25 (c) The right of a beneficiary to receive payment and damages as stated in (a) 26 of this section may not be varied by agreement or a funds-transfer system rule. The 27 right of a beneficiary to be notified as stated in (b) of this section may be varied by 28 agreement of the beneficiary or by a funds-transfer system rule if the beneficiary is 29 notified of the rule before initiation of the funds transfer. 30 Sec. 45.14.405. PAYMENT BY BENEFICIARY'S BANK TO 31 BENEFICIARY. (a) If the beneficiary's bank credits an account of the beneficiary
01 of a payment order, payment of the bank's obligation under AS 45.14.404(a) occurs 02 when and to the extent that 03 (1) the beneficiary is notified of the right to withdraw the credit; 04 (2) the bank lawfully applies the credit to a debt of the beneficiary; or 05 (3) funds with respect to the order are otherwise made available to the 06 beneficiary by the bank. 07 (b) If the beneficiary's bank does not credit an account of the beneficiary of 08 a payment order, the time when payment of the bank's obligation under 09 AS 45.14.404(a) occurs is governed by principles of law that determine when an 10 obligation is satisfied. 11 (c) Except as stated in (d) and (e) of this section, if the beneficiary's bank 12 pays the beneficiary of a payment order under a condition to payment or agreement 13 of the beneficiary giving the bank the right to recover payment from the beneficiary 14 if the bank does not receive payment of the order, the condition to payment or 15 agreement is not enforceable. 16 (d) A funds-transfer system rule may provide that payments made to 17 beneficiaries of funds transfers made through the system are provisional until receipt 18 of payment by the beneficiary's bank of the payment order it accepted. A 19 beneficiary's bank that makes a payment that is provisional under the rule is entitled 20 to refund from the beneficiary if the rule requires that both the beneficiary and the 21 originator be given notice of the provisional nature of the payment before the funds 22 transfer is initiated, if the beneficiary, the beneficiary's bank, and the originator's bank 23 agreed to be bound by the rule, and if the beneficiary's bank did not receive payment 24 of the payment order that it accepted. If the beneficiary is obliged to refund payment 25 to the beneficiary's bank, acceptance of the payment order by the beneficiary's bank 26 is nullified and a payment by the originator of the funds transfer to the beneficiary 27 does not occur under AS 45.14.406. 28 (e) This subsection applies to a funds transfer that includes a payment order 29 transmitted over a funds-transfer system that nets obligations multilaterally among 30 participants and has in effect a loss-sharing agreement among participants for the 31 purpose of providing funds necessary to complete settlement of the obligations of one
01 or more participants that do not meet their settlement obligations. If the beneficiary's 02 bank in the funds transfer accepts a payment order and the system fails to complete 03 settlement under its rules with respect to any payment order in the funds transfer, 04 (1) the acceptance by the beneficiary's bank is nullified and no person 05 has a right or obligation based on the acceptance; 06 (2) the beneficiary's bank is entitled to recover payment from the 07 beneficiary; 08 (3) payment by the originator to the beneficiary does not occur under 09 AS 45.14.406; and 10 (4) subject to AS 45.14.402(e), each sender in the funds transfer is 11 excused from its obligation to pay its payment order under AS 45.14.402(c) because 12 the funds transfer has not been completed. 13 Sec. 45.14.406. PAYMENT BY ORIGINATOR TO BENEFICIARY; 14 DISCHARGE OF UNDERLYING OBLIGATION. (a) Subject to AS 45.14.211(f) 15 and 45.14.405(d) and (e), the originator of a funds transfer pays the beneficiary of the 16 originator's payment order 17 (1) at the time a payment order for the benefit of the beneficiary is 18 accepted by the beneficiary's bank in the funds transfer; and 19 (2) in an amount equal to the amount of the order accepted by the 20 beneficiary's bank, but not more than the amount of the originator's order. 21 (b) If payment under (a) of this section is made to satisfy an obligation, the 22 obligation is discharged to the same extent discharge would result from payment to the 23 beneficiary of the same amount in money, unless 24 (1) the payment under (a) of this section was made by a means 25 prohibited by the contract of the beneficiary with respect to the obligation; 26 (2) the beneficiary, within a reasonable time after receiving notice of 27 receipt of the order by the beneficiary's bank, notifies the originator of the 28 beneficiary's refusal of the payment; 29 (3) funds with respect to the order were not withdrawn by the 30 beneficiary or applied to a debt of the beneficiary; and 31 (4) the beneficiary would suffer a loss that could reasonably have been
01 avoided if payment had been made by a means complying with the contract. 02 (c) If payment by the originator does not result in discharge under this section, 03 the originator is subrogated to the rights of the beneficiary to receive payment from 04 the beneficiary's bank under AS 45.14.404(a). 05 (d) For the purpose of determining whether discharge of an obligation occurs 06 under (b) of this section, if the beneficiary's bank accepts a payment order in an 07 amount equal to the amount of the originator's payment order less charges of one or 08 more receiving banks in the funds transfer, payment to the beneficiary is considered 09 to be in the amount of the originator's order unless upon demand by the beneficiary 10 the originator does not pay the beneficiary the amount of the deducted charges. 11 (e) Rights of the originator or of the beneficiary of a funds transfer under this 12 section may be varied only by agreement of the originator and the beneficiary. 13 ARTICLE 5. MISCELLANEOUS PROVISIONS. 14 Sec. 45.14.501. VARIATION BY AGREEMENT AND EFFECT OF FUNDS-TRANSFER SYSTEM RULE. (a) 15 Except as otherwise provided in this chapter, the 16 rights and obligations of a party to a funds transfer may be varied by agreement of the 17 affected party. 18 (b) Except as otherwise provided in this chapter, a funds-transfer system rule 19 governing rights and obligations between participating banks using the system may be 20 effective even if the rule conflicts with this chapter and indirectly affects another party 21 to the funds transfer who does not consent to the rule. A funds-transfer system rule 22 may also govern rights and obligations of parties other than participating banks using 23 the system, to the extent stated in AS 45.14.404(c), 45.14.405(d), and 45.14.507(c) and 24 (d). In this subsection, "funds-transfer system rule" means 25 (1) a rule of an association of banks governing transmission of payment 26 orders by means of a funds-transfer system of the association or rights and obligations 27 with respect to those orders; or 28 (2) a rule of an association of banks, to the extent the rule governs 29 rights and obligations between banks that are parties to a funds transfer in which a 30 federal reserve bank, acting as an intermediary bank, sends a payment order to the 31 beneficiary's bank.
01 Sec. 45.14.502. CREDITOR PROCESS SERVED ON RECEIVING BANK; 02 SETOFF BY BENEFICIARY'S BANK. (a) This subsection applies to creditor 03 process with respect to an authorized account of the sender of a payment order if the 04 creditor process is served on the receiving bank. For the purpose of determining rights 05 with respect to the creditor process, if the receiving bank accepts the payment order 06 the balance in the authorized account is considered to be reduced by the amount of the 07 payment order to the extent that the bank did not otherwise receive payment of the 08 order, unless the creditor process is served at a time and in a manner affording the 09 bank a reasonable opportunity to act on it before the bank accepts the payment order. 10 (b) If a beneficiary's bank has received a payment order for payment to the 11 beneficiary's account in the bank, the following rules apply: 12 (1) the bank may credit the beneficiary's account; the amount credited 13 may be set off against an obligation owed by the beneficiary to the bank or may be 14 applied to satisfy creditor process served on the bank with respect to the account; 15 (2) the bank may credit the beneficiary's account and allow withdrawal 16 of the amount credited unless creditor process with respect to the account is served at 17 a time and in a manner affording the bank a reasonable opportunity to act to prevent 18 withdrawal; 19 (3) if creditor process with respect to the beneficiary's account has been 20 served and the bank has had a reasonable opportunity to act on it, the bank may not 21 reject the payment order except for a reason unrelated to the service of process. 22 (c) Creditor process with respect to a payment by the originator to the 23 beneficiary in accordance with a funds transfer may be served only on the 24 beneficiary's bank with respect to the debt owed by that bank to the beneficiary. 25 Another bank served with the creditor process is not obliged to act with respect to the 26 process. 27 (d) In this section, "creditor process" means levy, attachment, garnishment, 28 notice of lien, sequestration, or similar process issued by or on behalf of a creditor or 29 other claimant with respect to an account. 30 Sec. 45.14.503. INJUNCTION OR RESTRAINING ORDER WITH RESPECT 31 TO FUNDS TRANSFER. (a) For proper cause and in compliance with applicable
01 law, a court may restrain 02 (1) a person from issuing a payment order to initiate a funds transfer; 03 (2) an originator's bank from executing the payment order of the 04 originator; or 05 (3) the beneficiary's bank from releasing funds to the beneficiary or the 06 beneficiary from withdrawing the funds. 07 (b) Except as provided in (a) of this section, a court may not otherwise restrain 08 a person from issuing a payment order, paying or receiving payment of a payment 09 order, or otherwise acting with respect to a funds transfer. 10 Sec. 45.14.504. ORDER IN WHICH ITEMS AND PAYMENT ORDERS 11 MAY BE CHARGED TO ACCOUNT; ORDER OF WITHDRAWALS FROM 12 ACCOUNT. (a) If a receiving bank has received more than one payment order of the 13 sender or one or more payment orders and other items that are payable from the 14 sender's account, the bank may charge the sender's account with respect to the various 15 orders and items in any sequence. 16 (b) In determining whether a credit to an account has been withdrawn by the 17 holder of the account or applied to a debt of the holder of the account, credits first 18 made to the account are first withdrawn or applied. 19 Sec. 45.14.505. PRECLUSION OF OBJECTION TO DEBIT OF 20 CUSTOMER'S ACCOUNT. If a receiving bank has received payment from its 21 customer with respect to a payment order issued in the name of the customer as sender 22 and accepted by the bank, and the customer received notification reasonably 23 identifying the order, the customer is precluded from asserting that the bank is not 24 entitled to retain the payment unless the customer notifies the bank of the customer's 25 objection to the payment within one year after the notification was received by the 26 customer. 27 Sec. 45.14.506. RATE OF INTEREST. (a) If, under this chapter, a receiving 28 bank is obliged to pay interest with respect to a payment order issued to the bank, the 29 amount payable may be determined 30 (1) by agreement of the sender and receiving bank; or 31 (2) by a funds-transfer system rule if the payment order is transmitted
01 through a funds-transfer system. 02 (b) If the amount of interest is not determined by an agreement or rule as 03 stated in (a) of this section, the amount is calculated by multiplying the applicable 04 federal funds rate by the amount on which interest is payable, and then multiplying the 05 product by the number of days for which interest is payable. The applicable federal 06 funds rate is the average of the federal funds rates published by the Federal Reserve 07 Bank of New York for each of the days for which interest is payable divided by 360. 08 The federal funds rate for a day on which a published rate is not available is the same 09 as the published rate for the next preceding day for which there is a published rate. 10 If a receiving bank that accepted a payment order is required to refund payment to the 11 sender of the order because the funds transfer was not completed, but the failure to 12 complete was not due to any fault by the bank, the interest payable is reduced by a 13 percentage equal to the reserve requirement on deposits of the receiving bank. 14 Sec. 45.14.507. CHOICE OF LAW. (a) The following rules apply unless the 15 affected parties otherwise agree or (c) - (d) of this section applies: 16 (1) the rights and obligations between the sender of a payment order 17 and the receiving bank are governed by the law of the jurisdiction in which the 18 receiving bank is located; 19 (2) the rights and obligations between the beneficiary's bank and the 20 beneficiary are governed by the law of the jurisdiction in which the beneficiary's bank 21 is located; 22 (3) the issue of when payment is made under a funds transfer by the 23 originator to the beneficiary is governed by the law of the jurisdiction in which the 24 beneficiary's bank is located. 25 (b) If the parties described in each paragraph of (a) of this section have made 26 an agreement selecting the law of a particular jurisdiction to govern rights and 27 obligations between each other, the law of that jurisdiction governs those rights and 28 obligations, whether or not the payment order or the funds transfer bears a reasonable 29 relation to that jurisdiction. 30 (c) A funds-transfer system rule may select the law of a particular jurisdiction 31 to govern
01 (1) rights and obligations between participating banks with respect to 02 payment orders transmitted or processed through the system; or 03 (2) the rights and obligations of some or all parties to a funds transfer 04 if a part of the funds transfer is carried out by means of the system. 05 (d) A choice of law made under (c)(1) of this section is binding on 06 participating banks. A choice of law made under (c)(2) of this section is binding on 07 the originator, other sender, or a receiving bank having notice that the funds-transfer 08 system might be used in the funds transfer and of the choice of law by the system 09 when the originator, other sender, or receiving bank issued or accepted a payment 10 order. The beneficiary of a funds transfer is bound by the choice of law if, when the 11 funds transfer is initiated, the beneficiary has notice that the funds-transfer system 12 might be used in the funds transfer and of the choice of law by the system. The law 13 of a jurisdiction selected under this subsection or (c) of this section may govern, 14 whether or not that law bears a reasonable relation to the matter in issue. 15 (e) In the event of inconsistency between an agreement under (b) of this 16 section and a choice-of-law rule under (c) - (d) of this section, the agreement under 17 (b) of this section prevails. 18 (f) If a funds transfer is made by use of more than one funds-transfer system 19 and there is inconsistency between choice-of-law rules of the systems, the matter in 20 issue is governed by the law of the selected jurisdiction that has the most significant 21 relationship to the matter in issue. 22 * Sec. 13. REVISOR CHANGES. The revisor of statutes shall update the citations to the 23 state's Uniform Commercial Code throughout the state statutes to reflect the changes made 24 by this Act. 25 * Sec. 14. APPLICABILITY. (a) AS 45.14, enacted by sec. 12 of this Act, and the other 26 provisions of this Act that apply to a funds transfer do not apply to a funds transfer that is 27 begun before January 1, 1994. 28 (b) A cause of action that accrued under AS 45.01 - AS 45.09 before January 1, 1994, 29 is governed by the law of Alaska existing before January 1, 1994. 30 * Sec. 15. CHANGE OF COURT RULES. AS 45.14.305(e) and 45.14.404(b), enacted by 31 sec. 12 of this Act, change Alaska Rule of Civil Procedure 82 by changing the criteria for the
01 award of attorney fees in certain circumstances. 02 * Sec. 16. This Act takes effect January 1, 1994.