4501-4504
COMMERCIAL CODE
SECTION 4501-4504
4501. 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.
4502. 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 arrived is not dishonor; the bank shall notify its
transferor of the refusal but need not present the draft again until
it is instructed to do so or learns of the arrival of the goods.
4503. Unless otherwise instructed and except as provided in
Division 5 (commencing with Section 5101), a bank presenting a
documentary draft:
(a) Shall deliver the documents to the drawee on acceptance of
the draft if it is payable more than three days after presentment;
otherwise, only on payment.
(b) Upon dishonor, either in the case of presentment for
acceptance or presentment for payment, may seek and follow
instructions from any referee in case of need designated in the draft
or, if the presenting bank does not choose to utilize the referee's
services, it shall use diligence and good faith to ascertain the
reason for dishonor, shall notify its transferor of the dishonor and
of the results of its effort to ascertain the reasons therefor, and
shall request instructions.
However, the presenting bank is under no obligation with respect
to goods represented by the documents except to follow any reasonable
instructions seasonably received; it has a right to reimbursement
for any expense incurred in following instructions and to prepayment
of or indemnity for those expenses.
4504. (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 otherwise
deal with the goods in any reasonable manner.
(b) For its reasonable expenses incurred by action under
subdivision (a), the presenting bank has a lien upon the goods or
their proceeds, which may be foreclosed in the same manner as an
unpaid seller's lien.