Title 27, Uniform Commercial Code

§490:3-506.5 Charges for dishonored checks. The payee or a holder in due course of any check, draft, or order for the payment of money that has been dishonored for lack of funds or credit to pay the check, draft, or order or because the maker has no account with the drawee shall …

PART 6. DISCHARGE AND PAYMENT §490:3-601 Discharge and effect of discharge. (a) The obligation of a party to pay the instrument is discharged as stated in this article or by an act or agreement with the party which would discharge an obligation to pay money under a simple contrac…

§490:3-602 Payment. (a) Subject to subsection (b), an instrument is paid to the extent payment is made (i) by or on behalf of a party obliged to pay the instrument, and (ii) to a person entitled to enforce the instrument. To the extent of the payment, the obligation of the party …

§490:3-603 Tender of payment. (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 pay…

§490:3-604 Discharge by cancellation or renunciation. (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, including surrender of the instrument to the par…

§490:3-605 Discharge of indorsers and accommodation parties. (a) In this section, the term "indorser" includes a drawer having the obligation described in section 490:3-414(d). (b) Discharge, under section 490:3-604, of the obligation of a party to pay an instrument does not disc…

ARTICLE 4. BANK DEPOSITS AND COLLECTIONS PART 1. GENERAL PROVISIONS AND DEFINITIONS §490:4-101 Short title. This article may be cited as Uniform Commercial Code--Bank Deposits and Collections. [L 1965, c 208, §4-101; HRS §490:4-101; am L 1991, c 118, pt of §4]

§490:4-102 Applicability. (a) To the extent that items within this article are also within articles 3 and 8, they are subject to those articles. If there is conflict, this article governs article 3, but article 8 governs this article. (b) The liability of a bank for action or non…

§490:4-103 Variation by agreement; measure of damages; action constituting ordinary care. (a) The effect of the provisions of this article 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…

§490:4-104 Definitions and index of definitions. (a) In this article, 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 b…

§490:4-105 "Bank"; "depositary bank"; "payor bank"; "intermediary bank"; "collecting bank"; "presenting bank". In this article: (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…

§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: (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 …

§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: (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 t…

§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: (1) The warrantor is a person entitled to enforce the item; (2) All sig…

§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: (1) The person obtaining payment or acceptance, at the time of presentment; and (2) A previous transferor of the draft, at …

§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: (1) In case of an item deposited in an account, to the extent to which…

§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: (1) …

§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: (1) Paid the item in cash; (2) Se…

§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: (1) A demand item, other than a documentary draft, whether properly payable or not, if the bank, in any case in …

§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: (1) Must deliver the documents to the drawee on a…

§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…