LAW OF OBLIGATION ACT, PART 8, CHAPTER 40, DIVISION 1

Chapter 40

PAYMENT ORDER AND PAYMENT SERVICE 

[RT I 2010, 2, 3 – entry into force 22.01.2010]

Division 1

Payment order 

  • 703. Payment order

(1) With a payment order, the authorised person is ordered to pay or transfer, at the expense of the originator, money or securities to a third party (beneficiary), and the beneficiary is entitled to accept the execution of the order.

(2) A payment order may be given, inter alia, by means of bill of exchange, cheque, credit card or any other similar payment instrument.

  • 704. Acceptance of payment order

Acceptance of a payment order is a declaration of intent by which the authorised person accepts the obligation arising from the payment order. The acceptance of a payment order issued in the form of a document shall be entered on the document.

  • 705. Execution of payment order

(1) The authorised person who has accepted the payment order shall undertake to perform the obligation arising from the payment order and may contest the claim of the beneficiary to execute the payment order only in so far as it arises from the relationship with the beneficiary or from the validity of the payment order or acceptance, and not from the relationship with the originator.

(2) If a payment order is issued in the form of a document, the authorised person shall perform the obligation arising from the payment order only if the document has been delivered to the authorised person.

(3) The authorised person is not required to accept a payment order or perform obligations arising therefrom only because the authorised person is an obligor of the originator. Upon execution of a payment order, the authorised person is however released from the obligations thereof to the extent to which the payment order is executed.

  • 706. Notification obligation of beneficiary

(1) If a beneficiary learns that the authorised person refuses to accept the payment order or perform the obligation arising therefrom, the beneficiary shall immediately notify the originator thereof.

(2) In the event of a violation of the notification obligation provided in subsection (1) of this section, the originator has the right to demand compensation from the beneficiary for damage caused by the violation of the obligation.

  • 707. Withdrawal of payment order

Until the authorised person has accepted a payment order or performed the obligation arising therefrom, the originator has the right to withdraw the payment order even if the originator thereby violates the obligations thereof to the beneficiary. In order to withdraw a payment order, the originator shall notify the authorised person thereof.

  • 708. Restrictions on expiry of payment order

A payment order does not expire upon the death or declaration of bankruptcy of the originator, authorised person or beneficiary

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