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HomeCommercial CodeDiv. 11Ch. 2§ 11206 Payment Order Transmission Rules

§ 11206 Payment Order Transmission Rules

Commercial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 11206 Payment Order Transmission Rules

This law says that if you send money through a system (like a bank transfer), and the system messes up your instructions, the messed-up version is what counts. It also covers changes or cancellations to money transfers.

Key Takeaways

  • •If a transfer system changes your payment instructions, the changed version is what counts.
  • •This rule also applies if you try to cancel or change a payment later.
  • •This doesn’t apply to transfers handled by the Federal Reserve Banks.

Example

You tell your bank to send $100 to your friend, but the transfer system changes it to $10 by mistake.

The law says your friend gets $10, not $100, because the system’s mistake is what matters.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 11206 Payment Order Transmission Rules

(a) If a payment order addressed to a receiving bank is transmitted to a funds-transfer system or other third-party communication system for transmittal to the bank, the system is deemed to be an agent of the sender for the purpose of transmitting the payment order to the bank. If there is a discrepancy between the terms of the payment order transmitted to the system and the terms of the payment order transmitted by the system to the bank, the terms of the payment order of the sender are those transmitted by the system. This section does not apply to a funds-transfer system of the Federal Reserve Banks. (b) This section applies to cancellations and amendments of payment orders to the same extent it applies to payment orders. (Added by Stats. 1990, Ch. 125, Sec. 2.)

Last verified: January 10, 2026

Key Terms

payment orderfunds-transfer systemagent of the senderdiscrepancycancellations and amendments

Related Statutes

  • § 11201 Payment Order Security Procedures
  • § 11202 Payment Order Authorization Rules
  • § 11203 Unauthorized Payment Order Limits
  • § 11207 Beneficiary Identification Rules
  • § 11210 Payment Order Rejection

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Commercial Code. Section 11206.
View Official Source