Title 11, Title 11

In this Article, unless the context otherwise indicates, the following terms have the following meanings. [PL 1993, c. 293, Pt. B, §10 (AMD).] (1). Depositary bank. "Depositary bank" means the first bank to take an item even though it is also the payor bank, unless the item is pr…

(1). If an item states that it is "payable through" a bank identified in the item: (a). The item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item; and [PL 1993, c. 293, Pt. B, §11 (NEW).] (b). The item may be presented for payment…

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‑A.

(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 ent…

(1). 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 Title f…

(1). "Agreement for electronic presentment" means an agreement, clearinghouse rule or Federal Reserve regulation or operating circular that provides that presentment of an item may be made by transmission of an image of an item or information describing that item, that is, a "pre…

An action to enforce an obligation, duty or right arising under this Article must be commenced within 3 years after the cause of action accrues.

(1). 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 subagent of the owner of the item and any settlement given for the item is provisiona…

(1). A collecting bank must exercise ordinary care in: (a). Presenting an item or sending it for presentment; [PL 1993, c. 293, Pt. B, §19 (AMD).] (b). Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank's transferor after lear…

Subject to Article 3‑A concerning conversion of instruments (section 3‑1420) and restrictive indorsements (section 3‑1206) 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 partie…

(1). 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.…

If a customer delivers an item to a depositary bank for collection: [PL 1993, c. 293, Pt. B, §22 (NEW).] (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…

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

(1). 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: (a). The warrantor is a person entitled to enforce the item; [PL 1993, c. 293, Pt. B, §25 (NEW).] (b).…

(1). If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, the person obtaining payment or acceptance, at the time of presentment, and a previous transferor of the draft, at the time of transfer, warrant to the drawe…

(1). 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 warran…

(1). A collecting 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 which i…

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 3‑1302 on what constitutes a holder in due course.

(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 sent in time to be received on or befo…

(1). With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearinghouse rules and the like or agreement. In the absence of such prescription: (a). The medium of settlement is cash or credit to an ac…

(1). 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 for the item which is or becomes final, the bank may revoke the settlement given by it, cha…

(1). An item is finally paid by a payor bank when the bank has first done any of the following: (a). Paid the item in cash; [PL 1993, c. 293, Pt. B, §34 (AMD).] (b). Settled for the item without having a right to revoke the settlement under statute, clearinghouse rule or agreemen…

(1). 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 presenting bank or the closed bank's cust…

(1). If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter before midnight of the banking day of receipt, the payor bank may revoke the settlement and recover the settlement, if, before it has made…

(1). If an item is presented to and received by a payor bank, the bank is accountable for the amount of: (a). A demand item, other than a documentary draft, whether properly payable or not, if the bank, in any case in which it is not also the depositary bank, retains the item bey…

(1). Any knowledge, notice or stop-payment order received by, legal process served upon or setoff exercised by a payor bank comes too late to terminate, suspend or modify the bank's right or duty to pay an item or to charge its customer's account for the item if the knowledge, no…

(1). 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 payable if it is authorized by the customer and is in accordance with any agreement between the customer an…

(1). 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 item that would create an overdraft unless it has agreed to pay the overdraft. (2). A payor bank is liable to …

(1). 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 describing the item or account with reasonable certainty received at a time a…

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 6 months after its date, but it may charge its customer's account for a payment made thereafter in good faith.

(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 i…

(1). (1-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 provide information in the statement of account sufficient to allow the customer …

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 prevent unjust enrichment and only to the extent necessary to prev…

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…

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 pay or accept because the goods have not arrive…

Unless otherwise instructed and except as provided in Article 5, a bank presenting a documentary draft: [PL 1993, c. 293, Pt. B, §47 (AMD).] (1). Must deliver the documents to the drawee on acceptance of the draft, if it is payable more than 3 days after presentment; otherwise, o…

(1). 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 otherwise deal with the goods in any reasonable manner. (2). For its reasonable expenses incurre…