Sec. 42a-4-301. Deferred posting. Recovery of payment by return of items. Time of dishonor. Return of items by payor bank.
Sec. 42a-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
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 final payment
and before its midnight deadline, it (1) returns the item; or (2) sends written notice of
dishonor or nonpayment if the item is unavailable for return.
(b) If a demand item is received by a payor bank for credit on its books, it may
return the item or send notice of dishonor and may revoke any credit given or recover
the amount thereof withdrawn by its customer, if it acts within the time limit and in the
manner specified in subsection (a).
(c) Unless previous notice of dishonor has been sent, an item is dishonored at the
time when for purposes of dishonor it is returned or notice sent in accordance with this
section.
(d) An item is returned: (1) As to an item presented through a clearinghouse, when
it is delivered to the presenting or last collecting bank or to the clearinghouse or is sent
or delivered in accordance with clearinghouse rules; or (2) in all other cases, when it is
sent or delivered to the bank's customer or transferor or pursuant to instructions.
(1959, P.A. 133, S. 4-301; P.A. 91-304, S. 95.)
History: P.A. 91-304 replaced numeric with alphabetic Subsec. indicators and alphabetic with numeric Subdiv. indicators, and made minor changes in wording.
Cited. 230 C. 486. Cited. 232 C. 167.
Cited. 32 CS 174.