Title 4 — Business and Commercial Law
88 chapters · 1,044 sections in this title.
Ark. Code Ann. § 4-3-401 Signature. [Effective until September 1, 2026.]
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(a) A person is not liable on an instrument unless (i) the person signed the instrument, or (ii) the person is represented by an agent or representative who signed the instrument and the signature is binding on the represented person under § 4-3-402. (b) A signature may be made (…
Ark. Code Ann. § 4-3-402 Signature by representative
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(a) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent the represented person would be bound if the s…
Ark. Code Ann. § 4-3-403 Unauthorized signature
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(a) Unless otherwise provided in this chapter or § 4-4-401 et seq., an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor of a person who in good faith pays the instrument or takes it for value. An unauthorized signature may be ratif…
Ark. Code Ann. § 4-3-404 Impostors — Fictitious payees
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(a) If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or to a person acting in concert with the impostor, by impersonating the payee of the instrument or a person authorized to act for the payee, an indo…
Ark. Code Ann. § 4-3-405 Employer's responsibility for fraudulent indorsement by employee
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(a) In this section:(1) “Employee” includes an independent contractor and employee of an independent contractor retained by the employer.(2) “Fraudulent indorsement” means (i) in the case of an instrument payable to the employer, a forged indorsement purporting to be that of the …
Ark. Code Ann. § 4-3-406 Negligence contributing to forged signature or alteration of instrument
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(a) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or the forgery against a person who, in good faith, pays the instrum…
Ark. Code Ann. § 4-3-407 Alteration
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(a) “Alteration” means (i) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (ii) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party. (b) Except …
Ark. Code Ann. § 4-3-408 Drawee not liable on unaccepted draft
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A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it.
Ark. Code Ann. § 4-3-409 Acceptance of draft — Certified check
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(a) “Acceptance” means the drawee's signed agreement to pay a draft as presented. It must be written on the draft and may consist of the drawee's signature alone. Acceptance may be made at any time and becomes effective when notification pursuant to instructions is given or the a…
Ark. Code Ann. § 4-3-410 Acceptance varying draft
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(a) If the terms of a drawee's acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat the draft as dishonored. In that case, the drawee may cancel the acceptance. (b) The terms of a draft are not varied by an acceptance to pay at …
Ark. Code Ann. § 4-3-411 Refusal to pay cashier's checks, teller's checks, and certified checks
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(a) In this section, “obligated bank” means the acceptor of a certified check or the issuer of a cashier's check or teller's check bought from the issuer. (b) If the obligated bank wrongfully (i) refuses to pay a cashier's check or certified check, (ii) stops payment of a teller'…
Ark. Code Ann. § 4-3-412 Obligation of issuer of note or cashier's check
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The issuer of a note or cashier's check or other draft drawn on the drawer is obliged to pay the instrument (i) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder, or (ii) if the issuer signed an incomplete in…
Ark. Code Ann. § 4-3-413 Obligation of acceptor
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(a) The acceptor of a draft is obliged to pay the draft (i) according to its terms at the time it was accepted, even though the acceptance states that the draft is payable “as originally drawn” or equivalent terms, (ii) if the acceptance varies the terms of the draft, according t…
Ark. Code Ann. § 4-3-414 Obligation of drawer
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(a) This section does not apply to cashier's checks or other drafts drawn on the drawer. (b) If an unaccepted draft is dishonored, the drawer is obliged to pay the draft (i) according to its terms at the time it was issued or, if not issued, at the time it first came into possess…
Ark. Code Ann. § 4-3-415 Obligation of indorser
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(a) Subject to subsections (b), (c), and (d) and to § 4-3-419(d), if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument (i) according to the terms of the instrument at the time it was indorsed, or (ii) if the indorser indorsed an incomplet…
Ark. Code Ann. § 4-3-416 Transfer warranties
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(a) A person who transfers an instrument for consideration warrants to the transferee and, if the transfer is by indorsement, to any subsequent transferee that:(1) the warrantor is a person entitled to enforce the instrument;(2) all signatures on the instrument are authentic and …
Ark. Code Ann. § 4-3-417 Presentment warranties
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(a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft, at the time of transfer, warrant to t…
Ark. Code Ann. § 4-3-418 Payment or acceptance by mistake
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(a) Except as provided in subsection (c), 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 § 4-4-403 or (ii) the signature of the drawer of the draft was authorized, the d…
Ark. Code Ann. § 4-3-419 Instruments signed for accommodation
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(a) If an instrument is issued for value given for the benefit of a party to the instrument (“accommodated party”) and another party to the instrument (“accommodation party”) signs the instrument for the purpose of incurring liability on the instrument without being a direct bene…
Ark. Code Ann. § 4-3-420 Conversion of instrument
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(a) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the inst…
Ark. Code Ann. § 4-3-501 Presentment
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(a) “Presentment” means a demand made by or on behalf of a person entitled to enforce an instrument (i) to pay the instrument made to the drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft payable at a bank, to the bank, or (ii) to accept …
Ark. Code Ann. § 4-3-502 Dishonor
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(a) Dishonor of a note is governed by the following rules:(1) If the note is payable on demand, the note is dishonored if presentment is duly made to the maker and the note is not paid on the day of presentment.(2) If the note is not payable on demand and is payable at or through…
Ark. Code Ann. § 4-3-503 Notice of dishonor
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(a) The obligation of an indorser stated in § 4-3-415(a) and the obligation of a drawer stated in § 4-3-414(d) may not be enforced unless (i) the indorser or drawer is given notice of dishonor of the instrument complying with this section or (ii) notice of dishonor is excused und…
Ark. Code Ann. § 4-3-504 Excused presentment and notice of dishonor
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(a) Presentment for payment or acceptance of an instrument is excused if (i) the person entitled to present the instrument cannot with reasonable diligence make presentment, (ii) the maker or acceptor has repudiated an obligation to pay the instrument or is dead or in insolvency …
Ark. Code Ann. § 4-3-505 Evidence of dishonor
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(a) The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated:(1) a document regular in form as provided in subsection (b) which purports to be a protest;(2) a purported stamp or writing of the drawee, payor bank, or presen…
Ark. Code Ann. § 4-3-601 Discharge and effect of discharge
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(a) The obligation of a party to pay the instrument is discharged as stated in this chapter or by an act or agreement with the party which would discharge an obligation to pay money under a simple contract. (b) Discharge of the obligation of a party is not effective against a per…
Ark. Code Ann. § 4-3-602 Payment
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(a) Subject to subsection (e), an instrument is paid to the extent payment is made by or on behalf of a party obliged to pay the instrument, and to a person entitled to enforce the instrument. (b) Subject to subsection (e), a note is paid to the extent payment is made by or on be…
Ark. Code Ann. § 4-3-603 Tender of payment
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(a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of tender is governed by principles of law applicable to tender of payment under a simple contract. (b) If tender of payment of an obligation to pay a…
Ark. Code Ann. § 4-3-604 Discharge by cancellation or renunciation. [Effective until September 1, 2026.]
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(a) A person entitled to enforce an instrument, with or without consideration, may discharge the obligation of a party to pay the instrument (i) by an intentional voluntary act, such as surrender of the instrument to the party, destruction, mutilation, or cancellation of the inst…
Ark. Code Ann. § 4-3-605 Discharge of secondary obligors
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(a) If a person entitled to enforce an instrument releases the obligation of a principal obligor in whole or in part, and another party to the instrument is a secondary obligor with respect to the obligation of that principal obligor, the following rules apply:(1) any obligations…
Ark. Code Ann. § 4-4-101 Short title
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This chapter may be cited as Uniform Commercial Code — Bank Deposits and Collections.
Ark. Code Ann. § 4-4-102 Applicability
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(a) To the extent that items within this chapter are also within Chapters 3 and 8 of this subtitle, they are subject to those chapters. If there is conflict, this chapter governs Chapter 3, but Chapter 8 governs this chapter. (b) The liability of a bank for action or non-action w…
Ark. Code Ann. § 4-4-103 Variation by agreement — Measure of damages — Action constituting ordinary care
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(a) The effect of the provisions of this chapter may be varied by agreement, but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, …
Ark. Code Ann. § 4-4-104 Definitions and index of definitions
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(a) In this chapter, unless the context otherwise requires:(1) “Account” means any deposit or credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit;(2) “Afternoon” means t…
Ark. Code Ann. § 4-4-105 Definitions of types of banks
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(1) In this chapter:(1) “Bank” means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union, or trust company;(2) “Depositary bank” means the first bank to take an item even though it is also the payor bank, unless the it…
Ark. Code Ann. § 4-4-106 Payable through or payable at bank — Collecting bank
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(a) If an item states that it is “payable through” a bank identified in the item, (i) the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item, and (ii) the item may be presented for payment only by or through the bank. (b) If an…
Ark. Code Ann. § 4-4-107 Separate office of a bank
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A branch or separate office of a bank is a separate bank for the purpose of computing the time within which and determining the place at or to which action may be taken or notice or orders must be given under this chapter and under Chapter 3 of this subtitle.
Ark. Code Ann. § 4-4-108 Time of receipt of items
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(a) For the purpose of allowing time to process items, prove balances, and make the necessary entries on its books to determine its position for the day, a bank may fix an afternoon hour of 2:00 p.m. or later as a cutoff hour for the handling of money and items and the making of …
Ark. Code Ann. § 4-4-109 Delays
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(a) Unless otherwise instructed, a collecting bank in a good faith effort to secure payment of a specific item drawn on a payor other than a bank, and with or without the approval of any person involved, may waive, modify, or extend time limits imposed or permitted by this subtit…
Ark. Code Ann. § 4-4-110 Electronic presentment
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(a) “Agreement for electronic presentment” means an agreement, clearinghouse rule, or Federal Reserve regulation or operating circular, providing that presentment of an item may be made by transmission of an image of an item or information describing the item (“presentment notice…
Ark. Code Ann. § 4-4-111 Statute of limitations
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An action to enforce an obligation, duty, or right arising under this chapter must be commenced within three (3) years after the cause of action accrues.
Ark. Code Ann. § 4-4-201 Status of collecting bank as agent and provisional status of credits — Applicability of chapter — Item indorsed “Pay Any Bank”
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(a) Unless a contrary intent clearly appears and before the time that a settlement given by a collecting bank for an item is or becomes final, the bank, with respect to the item, is an agent or sub-agent of the owner of the item and any settlement given for the item is provisiona…
Ark. Code Ann. § 4-4-202 Responsibility for collection or return — When action timely
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(a) A collecting bank must exercise ordinary care in:(1) presenting an item or sending it for presentment;(2) sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank's transferor after learning that the item has not been paid or ac…
Ark. Code Ann. § 4-4-203 Effect of instructions
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Subject to Chapter 3 of this subtitle concerning conversion of instruments (§ 4-3-420) and restrictive indorsements (§ 4-3-206), only a collecting bank's transferor can give instructions that affect the bank or constitute notice to it, and a collecting bank is not liable to prior…
Ark. Code Ann. § 4-4-204 Methods of sending and presenting — Sending directly to payor bank
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(a) A collecting bank shall send items by a reasonably prompt method, taking into consideration relevant instructions, the nature of the item, the number of those items on hand, the cost of collection involved, and the method generally used by it or others to present those items.…
Ark. Code Ann. § 4-4-205 Depositary bank holder of unindorsed item
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(1) If a customer delivers an item to a depositary bank for collection:(1) the depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer indorses the i…
Ark. Code Ann. § 4-4-206 Transfer between banks
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Any agreed method that identifies the transferor bank is sufficient for the item's further transfer to another bank.
Ark. Code Ann. § 4-4-207 Transfer warranties
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(a) A customer or collecting bank that transfers an item and receives a settlement or other consideration warrants to the transferee and to any subsequent collecting bank that:(1) the warrantor is a person entitled to enforce the item;(2) all signatures on the item are authentic …
Ark. Code Ann. § 4-4-208 Presentment warranties
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(a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft, at the time of transfer, warrant to t…
Ark. Code Ann. § 4-4-209 Encoding and retention warranties
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(a) A person who encodes information on or with respect to an item after issue warrants to any subsequent collecting bank and to the payor bank or other payor that the information is correctly encoded. If the customer of a depositary bank encodes, that bank also makes the warrant…