MasterCard Rules (PDF)

Licensing and Licensed Activities
2.18 Risk of Loss
2.18 Risk of Loss
A Responsible Customer may not be exempted from this Rule except upon
written notice by the General Counsel of the Corporation.
Each Customer bears all risk of loss, and the Corporation bears no risk of loss
with respect to all amounts owed by the Customer under the Standards except
to the extent any such amount is received by the Corporation, free and clear.
Each Customer remains fully responsible for fulfillment of, and must take all
actions necessary to fulfill, all of its obligations under the Standards, regardless
of whether the Customer designates a third party to perform all or any part of
such obligations on the Customer’s behalf. The fact that the Customer has
paid any portion of the amount owed to such third party designee does not
discharge the Customer’s obligations to the Corporation.
The Corporation may draw on the Customer’s funds to fulfill any of the
Customer’s obligations under the Standards, regardless of whether those funds
are held or Controlled by the Customer or by any third party designee, to the
same extent the Corporation is entitled to draw on funds from any settlement
account or funds of the Customer under the Standards, and regardless of
whether those funds are commingled with any other funds. If the Corporation
draws on the Customer’s funds, the Corporation is not required to reimburse
the Customer or any third party (whether a third party designee of the Customer
or another Customer) for funds drawn which are owned by any of them or
otherwise subject to any of their rights. The Customer and any third party
(whether a third party designee of the Customer or another Customer) bear all
risk and liability related to the funds drawn and jointly and severally indemnify
and hold the Corporation harmless from all liability and claims arising from any
such draw of funds. Each Customer bears all risk of loss, and the Corporation
bears no risk of loss with respect to all amounts owed by the Corporation
to the Customer under the Standards once the payment is received by the
Customer or a third party designee of the Customer and regardless of whether
or how such Transactions are cleared and settled. Each Customer must notify
the Corporation promptly in writing if any third party designee commingles
funds received for or from the Customer in connection with the Customer’s
Transactions with any other funds.
Each Customer must notify the Corporation promptly in writing of the details
of any failure of the Customer or any third party designee of the Customer to
meet any of their obligations with respect to payment of funds owed under
the Standards.
If a Customer’s third party designee advances funds on behalf of the Customer
to pay the Corporation or any other party entitled to receive those funds under
the Standards, then such payment is deemed to be a payment by the Customer,
and the Customer and the third party designee of the Customer jointly and
severally bear all of the risks of loss and must jointly and severally indemnify
and hold the Corporation harmless from any and all liability and claims arising
from any such payment.
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2-14 12 December 2012 • MasterCard Rules