The “Discharge For Value” Rule In Wire Transfer Law

LexisNexis (February 15, 2019, 10:19 AM EST) -- The concept of bona fide purchase permeates Anglo-American law. There are many variations on the theme. The law of wire transfers offers one variation. Under the “discharge for value” rule, a wire mistakenly sent from a debtor to a creditor may be applied to the debt by the creditor so long as the debt is fixed and liquidated, and the creditor applies the funds in good faith, without notice of the mistake. The debtor (the originator of the mistaken wire) can’t force the creditor to give back the funds based on principles of restitution....