Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor

84-4-501. 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, upon learning that the draft has not been paid or accepted in due course, shall seasonably notify its customer of the fact even though it may have discounted or bought the draft or extended credit available for withdrawal as of right. History: L. 1965, ch. 564, § 234; L. 1991, ch. 296, § 107; February 1, 1992. KANSAS COMMENT, 1996 This section is identical to the 1995 Official Text. The section is derived from the former 84-4-501 with stylistic amendments not meant to change the substantive law. This section sets forth the duties of a bank which takes a documentary draft for collection and forwards it for presentment. Usually the bank governed by this section will be the seller's bank to which documentary drafts have been sent by the seller for collection from the buyer by forwarding to the buyer's bank. Extending the bank's duty to give notice of dishonor even in discount transactions protects the drawer-seller by giving him notice that the transaction underlying the draft may not be proceeding as planned. For a pre-UCC Kansas decision which generally accords with this section, see Feeders Supply Co. v. First National Bank, 103 K. 654, 176 P. 129 (1918). Note that the analog to this section is 84-4-503, which deals with the duties of the presenting bank (normally the buyer's bank). See Kansas Comment 1996 to that section.