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2 chapters · 613 sections in this title.
Mich. Comp. Laws § 440.3407 Alteration; definition; discharge of party affected; enforcement of rights.
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Sec. 3407. (1) "Alteration" means (i) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (ii) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party. …
Mich. Comp. Laws § 440.3408 Check or draft; operation as assignment.
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Sec. 3408. A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it.
Mich. Comp. Laws § 440.3409 Acceptance of draft; definition; operation; “certified check” defined; refusal to certify.
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Sec. 3409. (1) "Acceptance" means the drawee's signed agreement to pay a draft as presented. It must be written on the draft and may consist of the drawee's signature alone. Acceptance may be made at any time and becomes effective when notification pursuant to instructions is giv…
Mich. Comp. Laws § 440.3410 Acceptance varying from terms of draft.
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Sec. 3410. (1) If the terms of a drawee's acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat the draft as dishonored. In that case, the drawee may cancel the acceptance. (2) The terms of a draft are not varied by an acceptance…
Mich. Comp. Laws § 440.3411 Obligated bank; definition; refusal to pay check; expenses or damages not recoverable.
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Sec. 3411. (1) As used in this section, "obligated bank" means the acceptor of a certified check or the issuer of a cashier's check or teller's check bought from the issuer. (2) If the obligated bank wrongfully (i) refuses to pay a cashier's check or certified check, (ii) stops p…
Mich. Comp. Laws § 440.3412 Note, cashier's check, or other draft; obligation of issuer to pay according to terms.
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Sec. 3412. The issuer of a note or cashier's check or other draft drawn on the drawer is obliged to pay the instrument (i) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder, or (ii) if the issuer signed an in…
Mich. Comp. Laws § 440.3413 Draft; obligation to pay according to terms; amount.
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Sec. 3413. (1) The acceptor of a draft is obliged to pay the draft (i) according to its terms at the time it was accepted, even though the acceptance states that the draft is payable "as originally drawn" or equivalent terms, (ii) if the acceptance varies the terms of the draft, …
Mich. Comp. Laws § 440.3414 Applicability of section; unaccepted draft; dishonor; payment according to terms; acceptance by bank; discharge of drawer; obligation of drawer if acceptor not bank and draft dishonored; disclaimer of liability; suspension of payments after expiration of 30-day period.
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Sec. 3414. (1) This section does not apply to cashier's checks or other drafts drawn on the drawer. (2) If an unaccepted draft is dishonored, the drawer is obliged to pay the draft (i) according to its terms at the time it was issued or, if not issued, at the time it first came i…
Mich. Comp. Laws § 440.3415 Dishonored instrument; obligation and liability of endorser.
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Sec. 3415. (1) Subject to subsections (2), (3), (4), and (5) and to section 3419(4), if an instrument is dishonored, an endorser is obliged to pay the amount due on the instrument (i) according to the terms of the instrument at the time it was endorsed, or (ii) if the endorser en…
Mich. Comp. Laws § 440.3416 Transfer of instrument for consideration; endorsement; warranties.
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Sec. 3416. (1) A person who transfers an instrument for consideration warrants to the transferee and, if the transfer is by endorsement, to any subsequent transferee all of the following: (a) That the warrantor is a person entitled to enforce the instrument. (b) That all signatur…
Mich. Comp. Laws § 440.3417 Presentment of unaccepted or dishonored draft; rights of parties.
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Sec. 3417. (1) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft, at the time of transfer, w…
Mich. Comp. Laws § 440.3418 Payment or acceptance by mistake.
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Sec. 3418. (1) Except as provided in subsection (3), if the drawee of a draft pays or accepts the draft and the drawee acted on the mistaken belief that (i) payment of the draft had not been stopped pursuant to section 4403 or (ii) the signature of the drawer of the draft was aut…
Mich. Comp. Laws § 440.3419 Accommodation parties.
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Sec. 3419. (1) If an instrument is issued for value given for the benefit of a party to the instrument ("accommodated party") and another party to the instrument ("accommodation party") signs the instrument for the purpose of incurring liability on the instrument without being a …
Mich. Comp. Laws § 440.3420 Conversion.
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Sec. 3420. (1) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect …
Mich. Comp. Laws § 440.3501 Presentment; definition; manner; rights of party to whom presentment is made.
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Sec. 3501. (1) "Presentment" means a demand made by or on behalf of a person entitled to enforce an instrument (i) to pay the instrument made to the drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft payable at a bank, to the bank, or (ii)…
Mich. Comp. Laws § 440.3502 Notes and drafts; dishonor.
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Sec. 3502. (1) Dishonor of a note is governed by the following rules: (a) If the note is payable on demand, the note is dishonored if presentment is duly made to the maker and the note is not paid on the date of presentment. (b) If the note is not payable on demand and is payable…
Mich. Comp. Laws § 440.3503 Notice of dishonor; manner; sufficiency; time periods.
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Sec. 3503. (1) The obligation of an endorser stated in section 3415(2) and the obligation of a drawer stated in section 3414(4) may not be enforced unless (i) the endorser or drawer is given notice of dishonor of the instrument complying with this section or (ii) notice of dishon…
Mich. Comp. Laws § 440.3504 Presentment, notice of dishonor, or delay in giving notice of dishonor; conditions for excuse.
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Sec. 3504. (1) Presentment for payment or acceptance of an instrument is excused if (i) the person entitled to present the instrument cannot with reasonable diligence make presentment, (ii) the maker or acceptor has repudiated an obligation to pay the instrument or is dead or in …
Mich. Comp. Laws § 440.3505 Admissible evidence creating presumption of dishonor; protest.
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Sec. 3505. (1) The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated: (a) A document regular in form as provided in subsection (2) which purports to be a protest. (b) A purported stamp or writing of the drawee, payor ba…
Mich. Comp. Laws § 440.3601 Discharge; effect against holder in due course.
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Sec. 3601. (1) 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 contract. (2) Discharge of the obligation of a party is not effective ag…
Mich. Comp. Laws § 440.3602 Discharge; payment; "signed" defined.
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Sec. 3602. (1) Subject to subsection (5), an instrument is paid to the extent payment is made by or on behalf of a party obliged to pay the instrument, and to a person entitled to enforce the instrument. (2) Subject to subsection (5), a note is paid to the extent payment is made …
Mich. Comp. Laws § 440.3603 Tender of payment; effect; refusal of tender as discharge; interest; obligor ready and able to pay on due date.
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Sec. 3603. (1) 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. (2) If tender of payment of an obligati…
Mich. Comp. Laws § 440.3604 Discharge by intentional voluntary act; canceling or striking out endorsement; "signed" defined.
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Sec. 3604. (1) 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, such as surrender of the instrument to the party, destruction, mutilation, or cancellation …
Mich. Comp. Laws § 440.3605 Secondary obligor; rights and duties; agreement to modification or to extend time when payments are due; obligation secured by interest in collateral; discharge; impairing value of interest in collateral; knowledge of accommodation; consent or waiver of discharge; release or extension; burden of persuasion; presumption.
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Sec. 3605. (1) If a person entitled to enforce an instrument releases the obligation of a principal obligor in whole or in part, and another party to the instrument is a secondary obligor with respect to the obligation of that principal obligor, the following rules apply: (a) Any…
Mich. Comp. Laws § 440.4101 Uniform commercial code—bank deposits and collections; short title.
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Sec. 4101. This article shall be known and may be cited as uniform commercial code—bank deposits and collections.
Mich. Comp. Laws § 440.4102 Conflict of laws; provisions applicable.
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Sec. 4102. (1) 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. (2) The liability of a bank for action or non-action with res…
Mich. Comp. Laws § 440.4103 Variation by agreement; measure of damages; action constituting ordinary care.
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Sec. 4103. (1) 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 exercise ordinary care or limit the measure of damages for the lack or failure.…
Mich. Comp. Laws § 440.4104 Definitions used in article.
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Sec. 4104. (1) As used in this article unless the context otherwise requires: (a) "Account" means any depositor credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit. (b) …
Mich. Comp. Laws § 440.4105 Additional definitions.
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Sec. 4105. As used in this article unless the context otherwise requires: (a) "Bank" means a person engaged in the business of banking, including a saving bank, saving and loan association, credit union, or trust company. (b) "Depositary bank" means the first bank to take an item…
Mich. Comp. Laws § 440.4106 “Payable through” and “payable at” explained; bank as collecting bank.
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Sec. 4106. (1) 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 be presented for payment only by or through the bank…
Mich. Comp. Laws § 440.4107 Bank branch or separate office as separate bank.
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Sec. 4107. 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 shall be given under this article and under article 3.
Mich. Comp. Laws § 440.4108 Time of receipt of items.
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Sec. 4108. (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 cut-off hour for the handling of money and items and the ma…
Mich. Comp. Laws § 440.4109 Collecting bank; waiving, modifying, or extending time limits; excuse for delay.
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Sec. 4109. (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 t…
Mich. Comp. Laws § 440.4110 “Agreement for electronic presentment” defined; presentment notice.
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Sec. 4110. (1) "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 describing the item ("presen…
Mich. Comp. Laws § 440.4111 Commencement of action under article; time period.
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Sec. 4111. 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.
Mich. Comp. Laws § 440.4201 Agency status of banks; provisional status of credits; applicability of article; endorsement with pay any bank.
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Sec. 4201. (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 sub-agent of the owner of the item and any settlement given for the item is…
Mich. Comp. Laws § 440.4202 Collecting bank; duties; exercising ordinary care; liability.
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Sec. 4202. (1) A collecting bank must exercise ordinary care in all of the following: (a) Presenting an item or sending it for presentment. (b) Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank's transferor after learning tha…
Mich. Comp. Laws § 440.4203 Collecting bank; instructions from transferor.
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Sec. 4203. Subject to article 3 concerning conversion of instruments (section 3420) and restrictive endorsements (section 3206) 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 …
Mich. Comp. Laws § 440.4204 Collecting bank; methods of sending items; presentment.
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Sec. 4204. (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 t…
Mich. Comp. Laws § 440.4205 Depositary bank; item delivered by customer for collection.
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Sec. 4205. If a customer delivers an item to a depositary bank for collection, then both of the following apply: (a) 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, …
Mich. Comp. Laws § 440.4206 Transfer between banks.
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Sec. 4206. Any agreed method which identifies the transferor bank is sufficient for the item's further transfer to another bank.
Mich. Comp. Laws § 440.4207 Warranties of customer and collecting bank on transfer of items; accrual of cause of action.
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Sec. 4207. (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 all of the following: (a) That the warrantor is a person entitled to enforce the item. (b) That al…
Mich. Comp. Laws § 440.4208 Presentment of unaccepted or dishonored draft; warranties of person obtaining payment and prior transferor; discharge; accrual of cause of action.
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Sec. 4208. (1) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft, at the time of transfer, w…
Mich. Comp. Laws § 440.4209 Electronic presentment; encoding of information and retaining items; warranties; recovery of damages, expenses, and loss of interest.
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Sec. 4209. (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 …
Mich. Comp. Laws § 440.4210 Security interest of collecting bank in items, accompanying documents, or proceeds.
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Sec. 4210. (1) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of any of the following: (a) If an item is deposited in an account, to the extent to which credit given for the item has been withdrawn or applied. (b) If an item fo…
Mich. Comp. Laws § 440.4211 Bank with security interest as holder in due course.
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Sec. 4211. 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 3302 on what constitutes a holder in due course.
Mich. Comp. Laws § 440.4212 Presentment by notice of item not payable by, through, or at a bank; treating item as dishonored.
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Sec. 4212. (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 record providing notice that the bank holds the item for acceptance or payment. The notice must be sent in time to be …
Mich. Comp. Laws § 440.4213 Settlement; medium and time.
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Sec. 4213. (1) 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, the following apply: (a) The medium of sett…
Mich. Comp. Laws § 440.4214 Right to charge-back or refund.
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Sec. 4214. (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 settleme…
Mich. Comp. Laws § 440.4215 Final payment of items by payor bank; final credit; availability of credit for withdrawal.
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Sec. 4215. (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. (b) Settled for the item without having a right to revoke the settlement under statute, clearing-house rule or agreement. (c) Made a provisional se…