Title 27, Uniform Commercial Code

§490:4-106 Payable through or payable at bank; collecting bank. (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…

§490:4-107 Separate office of a bank. 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 notices or orders must be given under this article and under article 3…

§490:4-108 Time of receipt of items. (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 cut-off hour for the handling…

§490:4-109 Delays. (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 permi…

§490:4-110 Electronic presentment. (a) "Agreement for electronic presentment" means an agreement, clearing-house 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 desc…

§490:4-111 Statute of limitations. An action to enforce an obligation, duty, or right arising under this article must be commenced within three years after the cause of action accrues. [L 1991, c 118, pt of §4]

PART 2. COLLECTION OF ITEMS: DEPOSITARY AND COLLECTING BANKS §490:4-201 Status of collecting bank as agent and provisional status of credits; applicability of article; item indorsed "pay any bank". (a) Unless a contrary intent clearly appears and before the time that a settlement…

§490:4-202 Responsibility for collection or return; when action timely. (a) A collecting bank must exercise ordinary care in: (b) A collecting bank exercises ordinary care under subsection (a) by taking proper action before its midnight deadline following receipt of an item, noti…

§490:4-203 Effect of instructions. Subject to article 3 concerning conversion of instruments (section 490:3-420) and restrictive indorsements (section 490:3-206), only a collecting bank's transferor can give instructions that affect the bank or constitute notice to it, and a coll…

§490:4-204 Methods of sending and presenting; sending directly to payor bank. (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 i…

§490:4-205 Depositary bank holder of unindorsed item. If a customer delivers an item to a depositary bank for collection:

§490:4-206 Transfer between banks. Any agreed method that identifies the transferor bank is sufficient for the item's further transfer to another bank. [L 1965, c 208, §4-206; HRS §490:4-206; am L 1991, c 118, pt of §4]

§490:4-207 Transfer warranties. (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: (b) If an item is dishonored, a customer or collecting bank transferrin…

§490:4-208 Presentment warranties. (a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft: (b) A drawee making payment may recover from a warrantor damages for breach of warranty equal to the amount paid by the dra…

§490:4-209 Encoding and retention warranties. (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 …

§490:4-210 Security interest of collecting bank in items, accompanying documents and proceeds. (a) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of either: (b) If credit given for several items received at one time or pursuant…

§490:4-211 When bank gives value for purposes of holder in due course. For purposes of determining its status as a holder in due course, a bank has given value to the extent it has a security interest in an item, if the bank otherwise complies with the requirements of section 490…

§490:4-212 Presentment by notice of item not payable by, through, or at a bank; liability of drawer or indorser. (a) 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 …

§490:4-213 Medium and time of settlement by bank. (a) With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearing-house rules, and the like, or agreement. In the absence of such prescription: (b) …

§490:4-214 Right of charge back or refund; liability of collecting bank; return of item. (a) If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive settlement fo…

§490:4-215 Final payment of item by payor bank; when provisional debits and credits become final; when certain credits become available for withdrawal. (a) An item is finally paid by a payor bank when the bank has first done any of the following: (b) If provisional settlement for…

§490:4-216 Insolvency and preference. (a) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item must be returned by the receiver, trustee, or agent in charge of the closed bank to the pre…

PART 3. COLLECTION OF ITEMS; PAYOR BANKS §490:4-301 Deferred posting; recovery of payment by return of items; time of dishonor; return of items by payor bank. (a) If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payme…

§490:4-302 Payor bank's responsibility for late return of item. (a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of: (b) The liability of a payor bank to pay an item pursuant to subsection (a) is subject to defenses based on brea…

§490:4-303 When items subject to notice, stop-payment order, legal process, or setoff; order in which items may be charged or certified. (a) Any knowledge, notice, or stop-payment order received by, legal process served upon, or setoff exercised by a payor bank comes too late to …

PART 4. RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER §490:4-401 When bank may charge customer's account. (a) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly…

§490:4-402 Bank's liability to customer for wrongful dishonor; time of determining insufficiency of account. (a) Except as otherwise provided in this article, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an it…

§490:4-403 Customer's right to stop payment; burden of proof of loss. (a) A customer or any person authorized to draw on the account if there is more than one person may stop payment of any item drawn on the customer's account or close the account by an order to the bank describi…

§490:4-404 Bank not obligated to pay check more than six months 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 accoun…

§490:4-405 Death or incompetence of customer. (a) 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 t…

§490:4-406 Customer's duty to discover and report unauthorized signature or alteration. (a) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or p…

§490:4-407 Payor bank's right to subrogation on improper payment. If a payor bank has paid an item over the order of the drawer or maker to stop payment, or after an account has been closed, or otherwise under circumstances giving a basis for objection by the drawer or maker, to …

PART 5. COLLECTION OF DOCUMENTARY DRAFTS §490:4-501 Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor. A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and…

§490:4-502 Presentment of "on arrival" drafts. If a draft or the relevant instructions require presentment "on arrival", "when 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 …

§490:4-503 Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of need. Unless otherwise instructed and except as provided in article 5, a bank presenting a documentary draft: However, the presenting bank is under no obligati…

§490:4-504 Privilege of presenting bank to deal with goods; security interest for expenses. (a) A presenting bank that, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell, or othe…

ARTICLE 4A. FUNDS TRANSFERS PART 1. SUBJECT MATTER AND DEFINITIONS §490:4A-101 Short title. This article may be cited as Uniform Commercial Code -- Funds Transfers. [L 1991, c 41, pt of §1]

§490:4A-102 Subject matter. Except as otherwise provided in section 490:4A-108, this article applies to funds transfers defined in section 490:4A-104. [L 1991, c 41, pt of §1]

§490:4A-103 Payment order--definitions. (a) In this article: "Beneficiary" means the person to be paid by the beneficiary's bank. "Beneficiary's bank" means the bank identified in a payment order in which an account of the beneficiary is to be credited pursuant to the order or th…

§490:4A-104 Funds transfer--definitions. In this article:

§490:4A-105 Other definitions. (a) In this article: (b) Other definitions applying to this article and the sections in which they appear are: "Acceptance". Section 490:4A-209. "Beneficiary". Section 490:4A-103. "Beneficiary's bank". Section 490:4A-103. "Executed". Section 490:4A-…

§490:4A-106 Time payment order is received. (a) The time of receipt of a payment order or communication canceling or amending a payment order is determined by the rules applicable to receipt of a notice stated in section 490:1-202. A receiving bank may fix a cut-off time or times…

§490:4A-107 Federal reserve regulations and operating circulars. Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the Federal Reserve Banks supersede any inconsistent provision of this article to the extent of the inconsistency. [L 19…

§490:4A-108 Relationship to Electronic Fund Transfer Act. (a) Except as provided in subsection (b), this article does not apply to a funds transfer any part of which is governed by the Electronic Fund Transfer Act of 1978 (title XX, Public Law 95-630, 92 Stat. 3728, 15 U.S.C. §16…

PART 2. ISSUE AND ACCEPTANCE OF PAYMENT ORDER §490:4A-201 Security procedure. "Security procedure" means a procedure established by agreement of a customer and a receiving bank for the purpose of (i) verifying that a payment order or communication amending or canceling a payment …

§490:4A-202 Authorized and verified payment orders. (a) A payment order received by the receiving bank is the authorized order of the person identified as sender if that person authorized the order or is otherwise bound by it under the law of agency. (b) If a bank and its custome…

§490:4A-203 Unenforceability of certain verified payment orders. (a) If an accepted payment order is not, under section 490:4A-202(a), an authorized order of a customer identified as sender, but is effective as an order of the customer pursuant to section 490:4A-202(b), the follo…

§490:4A-204 Refund of payment and duty of customer to report with respect to unauthorized payment order. (a) If a receiving bank accepts a payment order issued in the name of its customer as sender which is (i) not authorized and not effective as the order of the customer under s…

§490:4A-205 Erroneous payment orders. (a) If an accepted payment order was transmitted pursuant to a security procedure for the detection of error and the payment order (i) erroneously instructed payment to a beneficiary not intended by the sender, (ii) erroneously instructed pay…

§490:4A-206 Transmission of payment order through funds-transfer or other communication system. (a) If a payment order addressed to a receiving bank is transmitted to a funds-transfer system or other third-party communication system for transmittal to the bank, the system is deem…