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Colorado Revised Statutes

Colo. Rev. Stat. § 4-3-418 (2026)

Payment or acceptance by mistake

✓ current as of July 2026
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(a) Except as provided in subsection (c) of this section, if the drawee of a draft pays or accepts the draft and the drawee acted on the mistaken belief that (i) payment of the draft had not been stopped pursuant to section 4-4-403 or

(ii) the signature of the drawer of the draft was authorized, the drawee may recover the amount of the draft from the person to whom or for whose benefit payment was made or, in the case of acceptance, may revoke the acceptance. Rights of the drawee under this subsection are not affected by failure of the drawee to exercise ordinary care in paying or accepting the draft.

(b) Except as provided in subsection (c) of this section, if an instrument has been paid or accepted by mistake and the case is not covered by subsection (a) of this section, the person paying or accepting may, to the extent permitted by the law governing mistake and restitution, (i) recover the payment from the person to whom or for whose benefit payment was made or (ii) in the case of acceptance, may revoke the acceptance.

(c) The remedies provided by subsection (a) or (b) of this section may not be asserted against a person who took the instrument in good faith and for value or who in good faith changed position in reliance on the payment or acceptance. This subsection does not limit remedies provided by section 4-3-417 or 4-4-407.

(d) Notwithstanding section 4-4-215, if an instrument is paid or accepted by mistake and the payor or acceptor recovers payment or revokes acceptance under subsection (a) or (b) of this section, the instrument is deemed not to have been paid or accepted and is treated as dishonored, and the person from whom payment is recovered has rights as a person entitled to enforce the dishonored instrument.

Source: L. 94: Entire article R&RE, p. 871, § 1, effective January 1, 1995.

Editor's note: This section is similar to former § 4-3-418 as it existed prior to 1994.

Notes of Decisions
Cited in 3 cases, 2000–2004 · leading case: Flatiron Linen, Inc. v. First Am. State Bank, 23 P.3d 1209 (Colo. 2001).
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Flatiron Linen, Inc. v. First Am. State Bank, 23 P.3d 1209 (Colo. 2001). · cites it 11× “Section 4-3-418 discusses when a bank has paid or accepted a draft by mistake.”
Flatiron Linen, Inc. v. First Am. State Bank, 1 P.3d 244 (Colo. Ct. App. 2000). “Indeed, the precise scenario involved in this case is considered in the official comments to § 4-3-418, that is, a bank issues a cashier's check by mistake in exchange for a check drawn on it upon which a stop payment order has issued.”
United States v. Pauling, 60 M.J. 91 (C.A.A.F. 2004). “C.R.S § 4-3-418(c). Under paragraph 48(c)(4) of the Manual for Courts-Martial regarding apparent legal efficacy, “the writing must 5 United States v.”
— Colo. Rev. Stat. § 4-3-418(a) — 1 case
Flatiron Linen, Inc. v. First Am. State Bank, 23 P.3d 1209 (Colo. 2001). “Section 4-3-418 discusses when a bank has paid or accepted a draft by mistake.”
— Colo. Rev. Stat. § 4-3-418(c) — 2 cases
Flatiron Linen, Inc. v. First Am. State Bank, 23 P.3d 1209 (Colo. 2001). “Section 4-3-418 discusses when a bank has paid or accepted a draft by mistake.”
United States v. Pauling, 60 M.J. 91 (C.A.A.F. 2004). “C.R.S § 4-3-418(c). Under paragraph 48(c)(4) of the Manual for Courts-Martial regarding apparent legal efficacy, “the writing must 5 United States v.”
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