Sec. 42a-4-303. When items subject to notice, stop-payment order, legal process or set-off. Order in which items may be charged or certified.
Sec. 42a-4-303. When items subject to notice, stop-payment order, legal process or set-off. Order in which items may be charged or certified. (a) Any knowledge,
notice or stop-payment order received by, legal process served upon, or set-off 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, notice,
stop-payment order, or legal process is received or served and a reasonable time for the
bank to act thereon expires or the set-off is exercised after the earliest of the following:
(1) The bank accepts or certifies the item; (2) the bank pays the item in cash; (3) the
bank settles for the item without having a right to revoke the settlement under statute,
clearinghouse rule, or agreement; (4) the bank becomes accountable for the amount of
the item under section 42a-4-302 dealing with the payor bank's responsibility for late
return of items; or (5) with respect to checks, a cutoff hour no earlier than one hour after
the opening of the next banking day after the banking day on which the bank received
the check and no later than the close of that next banking day or, if no cutoff hour is
fixed, the close of the next banking day after the banking day on which the bank received
the check.
(b) Subject to subsection (a), items may be accepted, paid, certified, or charged to
the indicated account of its customer in any order.
(1959, P.A. 133, S. 4-303; P.A. 91-304, S. 97.)
History: P.A. 91-304 deleted former Subsec. (1)(d) re the bank's completion of the process of posting or otherwise
evidencing its decision to pay the item, replaced numeric with alphabetic Subsec. indicators and alphabetic with numeric
Subdiv. indicators, added Subsec. (a)(5) re a cutoff hour for checks and made minor changes in wording throughout section.
Cited. 230 C. 486. Cited. 232 C. 167.
Subsec. (a) (Formerly Subsec. (1)):
Cited. 205 C. 604. "Reasonable time", as used in section, requires a fact-specific inquiry and is not synonymous with
the midnight deadline provided in Sec. 42a-4-104(a). 262 C. 704.
Subsec. (b) (Formerly Subsec. (2)):
Cited. 5 Conn. Cir. Ct. 403.