Title 13, Uniform Commercial Code

Payor Bank; Presenting Bank; Remitting Bank. In this division unless the context otherwise requires: (a) Depositary bank means the first bank to which an item is transferred for collection even though it is also the payor bank; (b) Payor bank means a bank by which an item is paya…

A branch or separate office of a bank is a separate bank for the COL120106 purpose of computing the time within which and determining the place at or to which action may be taken or notices or orders shall be given under this division and under Division 3, and the receipt of any …

(1) 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 p.m. or later as a cutoff hour for the handling of money and items and the making of entr…

(1) Unless otherwise instructed, a collecting bank in a good faith effort to secure payment may, in the case of specific items and with or without the approval of any person involved, waive, modify or extend time limits imposed or permitted by this code for a period not in excess…

The process of posting means the usual procedure followed by a payor bank in determining to pay an item and in recording the payment including one or more of the following or other steps as determined by the bank: (a) verification of any signature; COL120106 (b) ascertaining that…

Banks and Provisional Status of Credits; Applicability of Division; Item Indorsed "Pay Any Bank". (1) Unless a contrary intent clearly appears and prior to the time that a settlement given by a collecting bank for an item is or becomes final (subdivision (3) of Section 4211 and S…

(1) A collecting bank must use ordinary care in: (a) Presenting an item or sending it for presentment; and (b) 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 a…

Subject to the provisions of Division 3 concerning conversion of instruments (Section 3419) and the provisions of both Division 3 and this division concerning restrictive endorsements only a collecting bank's transferor can give instructions which affect the bank or constitute no…

Bank. (1) A collecting bank must send items by reasonably prompt method taking into consideration any relevant instructions, the nature of the item, the number of such items on hand, and the cost of collection involved and the method generally used by it or others to present such…

Indorsement. (1) A depositary bank which has taken an item for collection may supply any indorsement of the customer which is necessary to title unless the item contains the words Apayee's indorsement required@ or the like. In the absence of such a requirement a statement placed …

Any agreed method which identifies the transferor bank is sufficient for the item's further transfer to another bank.

Presentment of Items; Time for Claims. (1) Each customer or collecting bank who obtains payment or acceptance of an item and each prior customer and collecting bank warrants to the payor bank or other payor who in good faith pays or accepts the item that (a) he has a good title t…

Documents and Proceeds. (1) A bank has a security interest in an item and any accompanying documents or the proceeds of either (a) In case of an item deposited in an account to the extent to which credit given for the item has been withdrawn or applied; (b) In case of an item for…

Course. For purposes of determining its status as a holder in due course, the bank has given value to the extent that it has a security interest in an item provided that the bank otherwise complies with the requirements of Section 3302 on what constitutes a holder in due course.

a Bank; Liability of Secondary Parties. (1) Unless otherwise instructed, a collecting bank may present an item not payable by, through or at a bank by sending to the party to accept or pay a written notice that the bank holds the item for acceptance or payment. The notice must be…

Remittance Cases. (1) A collecting bank may take in settlement of an item (a) A check of the remitting bank or of another bank on any bank except the remitting bank; or (b) A cashier's check or similar primary obligation of a remitting bank which is a member of or clears through …

(1) If a collecting bank has made provisional settlement with its customer for an item and itself fails by reason of dishonor, suspension of payments by a bank or otherwise to receive a settlement for the item which is or becomes final, the bank may revoke the settlement given by…

Debits and Credits Become Final; When Certain Credits Become Available for Withdrawal. (1) An item is finally paid by a payor bank when the bank has done any of the following, whichever happens first: (a) Paid the item in cash; or COL120106 (b) Settled for the item without reserv…

(1) Any item in or coming into the possession of a payor or collecting bank which suspends payment and which item is not finally paid shall be returned by the receiver, trustee or agent in charge of the closed bank to the presenting bank or the closed bank's customer. (2) If a pa…

Time of Dishonor. (1) Where an authorized settlement for a demand item (other than a documentary draft) received by a payor bank otherwise than for immedi- ate payment over the counter has been made before midnight of the banking day of receipt the payor bank may revoke the settl…

In the absence of a valid defense such as breach of a presentment warranty (subdivision (1) of section 4207), settlement effected or the like, if an item is presented on and received by a payor bank the bank is accountable for the amount of (a) A demand item other than a document…

Setoff; Order in Which Items May Be Charged or Certified. COL120106 (1) Any knowledge, notice or stop order received by, legal process served upon or setoff exercised by a payor bank, whether or not effective under other rules of law to terminate, suspend or modify the bank's rig…

(1) As against its customer, a bank may charge against his account any item which is otherwise properly payable from that account even though the charge creates an overdraft and in such event recover or obtain refund of the amount of the overdraft. (2) A bank which in good faith …

A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. When the dishonor occurs through mistake liability is limited to actual damages proved. If so proxi- mately caused and proved, damages may include damages for an arrest or p…

(1) A customer, or any customer if there is more than one, or any person authorized to sign checks or make withdrawals thereon may stop payment of any item payable for or drawn against such customer's or customers' account but the bank may disregard the same unless the order is i…

Old. A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months after its date, but it may charge its customer's account for a payment made thereafter.

(1) A payor or collecting bank's authority to accept, pay or collect an item or to account for proceeds of its collection if otherwise effective is not rendered ineffective by incompetence of a customer of either bank existing at the time the item is issued or its collection is u…

Signature or Alteration. (1) When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement and items pursuant to a request or instructions of its customer or otherwise in a reasonable manner…

If payor bank has paid an item over the stop payment order of the drawer or maker or otherwise under circumstances giving a basis for objection by the drawer or maker, to prevent unjust enrichment and only to the extent necessary to prevent loss to the bank by reason of its pay- …

Presentment and to Notify Customer of Dishonor. A bank which takes a documentary draft for collection must present or send the draft and accompanying documents for presentment and upon learning that the draft has not been paid or accepted in due course must seasonably notify its …

When a draft or the relevant instructions require presentment Aon arrival,@ Awhen goods arrive@ or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to pay or accept because the goods have not arri…

Report of Reasons for Dishonor; Referee in Case of Need. Unless otherwise instructed and except as provided in Division 5 a bank presenting a documentary draft (a) Must deliver the documents to the drawee on acceptance of the draft if it is payable more than three days after pres…

Interest for Expenses. (1) A presenting bank which, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell, or otherwise deal with the goods in any reasonable manner. (2) For its reas…