NCJ Number
121937
Journal
Cornell International Law Journal Volume: 22 Issue: 1 Dated: (Winter 1989) Pages: 91-113
Date Published
1989
Length
23 pages
Annotation
This article examines the law governing electronic funds transfer, with special emphasis on the allocation of liability when fraud or negligence in wire transfers leads to loss.
Abstract
Current case law governing bank liability when electronic funds transfers are sent or received negligently is discussed, with the conclusion that the law is not consistent or fair in identifying legal rights and responsibilities in transfer cases. Two proposals to improve the law are examined, one put forward by the United Nations Commission on International Trade Law and the other, a proposed change in Article 4A of the Uniform Commercial Code. Bradford Trust v. Texas American Bank-Houston, the first Federal court of appeals case addressing the problem of account name and number discrepancies in wire transfers, is discussed in detail along with relevant international law issues. The article advocates placing liability on a receiving bank if it pays an electronic funds transfer order with a discrepancy between account name and number. This proposal, advocated also by the drafters of the revised Uniform Commercial Code, should be adopted by U.S. courts and legislatures as well as by the international banking community. 156 footnotes.