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Part 5 - Dishonor

      (810 ILCS 5/Art. 3 Pt. 5 heading)PART 5. DISHONOR

(810 ILCS 5/3‑501) (from Ch. 26, par. 3‑501)     Sec. 3‑501. Presentment.     (a) "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) to accept a draft made to the drawee.     (b) The following rules are subject to Article 4, agreement of the parties, and clearing‑house rules and the like:         (1) Presentment may be made at the place of payment

of the instrument and must be made at the place of payment if the instrument is payable at a bank in the United States; may be made by any commercially reasonable means, including an oral, written, or electronic communication; is effective when the demand for payment or acceptance is received by the person to whom presentment is made; is effective if made to any one of 2 or more makers, acceptors, drawees or other payors.

(2) Upon demand of the person to whom presentment is

made, the person making presentment must (i) exhibit the instrument, (ii) give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so, and (iii) sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made.

(3) Without dishonoring the instrument, the party to

whom presentment is made may (i) return the instrument for lack of a necessary endorsement, or (ii) refuse payment or acceptance for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule.

(4) The party to whom presentment is made may treat

presentment as occurring on the next business day after the day of presentment if the party to whom presentment is made has established a cut‑off hour not earlier than 2 p.m. for the receipt and processing of instruments presented for payment or acceptance and presentment is made after the cut‑off hour.

(Source: P.A. 87‑582; 87‑1135.)

(810 ILCS 5/3‑502) (from Ch. 26, par. 3‑502)     Sec. 3‑502. Dishonor.     (a) Dishonor of a note is governed by the following rules:         (1) 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 day of presentment.

(2) If the note is not payable on demand and is

payable at or through a bank or the terms of the note require presentment, the note is dishonored if presentment is duly made and the note is not paid on the day it becomes payable or the day of presentment, whichever is later.

(3) If the note is not payable on demand and

paragraph (2) does not apply, the note is dishonored if it is not paid on the day it becomes payable.

(b) Dishonor of an unaccepted draft other than a documentary draft is governed by the following rules:         (1) If a check is duly presented for payment to the

payor bank otherwise than for immediate payment over the counter, the check is dishonored if the payor bank makes timely return of the check or sends timely notice of dishonor or nonpayment under Section 4‑301 or 4‑302, or becomes accountable for the amount of the check under Section 4‑302.

(2) If a draft is payable on demand and paragraph

(1) does not apply, the draft is dishonored if presentment for payment is duly made to the drawee and the draft is not paid on the day of presentment.

(3) If a draft is payable on a date stated in the

draft, the draft is dishonored if (i) presentment for payment is duly made to the drawee and payment is not made on the day the draft becomes payable or the day of presentment, whichever is later, or (ii) presentment for acceptance is duly made before the day the draft becomes payable and the draft is not accepted on the day of presentment.

(4) If a draft is payable on elapse of a period of

time after sight or acceptance, the draft is dishonored if presentment for acceptance is duly made and the draft is not accepted on the day of presentment.

(c) Dishonor of an unaccepted documentary draft occurs according to the rules stated in subsection (b)(2), (3), and (4), except that payment or acceptance may be delayed without dishonor until no later than the close of the third business day of the drawee following the day on which payment or acceptance is required by those paragraphs.     (d) Dishonor of an accepted draft is governed by the following rules:         (1) If the draft is payable on demand, the draft is

dishonored if presentment for payment is duly made to the acceptor and the draft is not paid on the day of presentment.

(2) If the draft is not payable on demand, the draft

is dishonored if presentment for payment is duly made to the acceptor and payment is not made on the day it becomes payable or the day of presentment, whichever is later.

(e) In any case in which presentment is otherwise required for dishonor under this Section and presentment is excused under Section 3‑504, dishonor occurs without presentment if the instrument is not duly accepted or paid.     (f) If a draft is dishonored because timely acceptance of the draft was not made and the person entitled to demand acceptance consents to a late acceptance, from the time of acceptance the draft is treated as never having been dishonored. (Source: P.A. 87‑582; 87‑1135.)

(810 ILCS 5/3‑503) (from Ch. 26, par. 3‑503)     Sec. 3‑503. Notice of dishonor.     (a) The obligation of an indorser stated in Section 3‑415(a) and the obligation of a drawer stated in Section 3‑414(d) may not be enforced unless (i) the indorser or drawer is given notice of dishonor of the instrument complying with this Section or (ii) notice of dishonor is excused under Section 3‑504(b).     (b) Notice of dishonor may be given by any person; may be given by any commercially reasonable means, including an oral, written, or electronic communication; and is sufficient if it reasonably identifies the instrument and indicates that the instrument has been dishonored or has not been paid or accepted. Return of an instrument given to a bank for collection is a sufficient notice of dishonor.     (c) Subject to Section 3‑504(c), with respect to an instrument taken for collection by a collecting bank, notice of dishonor must be given (i) by the bank before midnight of the next banking day following the banking day on which the bank receives notice of dishonor of the instrument, or (ii) by any other person within 30 days following the day on which the person receives notice of dishonor. With respect to any other instrument, notice of dishonor must be given within 30 days following the day on which dishonor occurs. (Source: P.A. 87‑582; 87‑1135.)

(810 ILCS 5/3‑504) (from Ch. 26, par. 3‑504)     Sec. 3‑504. Excused presentment and notice of dishonor.     (a) 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 insolvency proceedings, (iii) by the terms of the instrument presentment is not necessary to enforce the obligation of indorsers or the drawer, (iv) the drawer or indorser whose obligation is being enforced has waived presentment or otherwise has no reason to expect or right to require that the instrument be paid or accepted, or (v) the drawer instructed the drawee not to pay or accept the draft or the drawee was not obligated to the drawer to pay the draft.     (b) Notice of dishonor is excused if (i) by the terms of the instrument notice of dishonor is not necessary to enforce the obligation of a party to pay the instrument, or (ii) the party whose obligation is being enforced waived notice of dishonor. A waiver of presentment is also a waiver of notice of dishonor.     (c) Delay in giving notice of dishonor is excused if the delay was caused by circumstances beyond the control of the person giving the notice and the person giving the notice exercised reasonable diligence after the cause of the delay ceased to operate. (Source: P.A. 87‑582; 87‑1135.)

(810 ILCS 5/3‑505) (from Ch. 26, par. 3‑505)     Sec. 3‑505. Evidence of dishonor.     (a) The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated:         (1) a document regular in form as provided in

subsection (b) which purports to be a protest;

(2) a purported stamp or writing of the drawee,

payor bank, or presenting bank on or accompanying the instrument stating that acceptance or payment has been refused unless reasons for the refusal are stated and the reasons are not consistent with dishonor;

(3) a book or record of the drawee, payor bank, or

collecting bank, kept in the usual course of business which shows dishonor, even if there is no evidence of who made the entry.

(b) A protest is a certificate of dishonor made by a United States consul or vice consul, or a notary public or other person authorized to administer oaths by the law of the place where dishonor occurs. It may be made upon information satisfactory to that person. The protest must identify the instrument and certify either that presentment has been made or, if not made, the reason why it was not made, and that the instrument has been dishonored by nonacceptance or nonpayment. The protest may also certify that notice of dishonor has been given to some or all parties. (Source: P.A. 87‑582; 87‑1135.)

(810 ILCS 5/3‑505A) (from Ch. 26, par. 3‑505A)     Sec. 3‑505A. Provision of credit card number as a condition of check cashing or acceptance prohibited.     (1) No person may record the number of a credit card given as identification or given as proof of creditworthiness when payment for goods or services is made by check or draft other than a transaction in which the check or draft is issued in payment of the credit card designated by the credit card number.     (2) This Section shall not prohibit a person from requesting a purchaser to display a credit card as indication of creditworthiness and financial responsibility or as additional identification, but the only information concerning a credit card which may be recorded is the type of credit card so displayed and the issuer of the credit card. This Section shall not require acceptance of a check or draft whether or not a credit card is presented.     (3) This Section shall not prohibit a person from requesting or receiving a credit card number or expiration date and recording the number or date, or both, in lieu of a deposit to secure payment in the event of default, loss, damage, or other occurrence.     (4) This Section shall not prohibit a person from recording a credit card number and expiration date as a condition for cashing or accepting a check or draft if that person, firm, partnership or association has agreed with the card issuer to cash or accept checks and share drafts from the issuer's cardholders and the issuer guarantees cardholder checks and drafts cashed or accepted by that person.     (5) Recording a credit card number in connection with a sale of goods or services in which the purchaser pays by check or draft, or in connection with the acceptance of a check or draft, is a business offense with a fine not to exceed $500.     As used in this Section, credit card has the meaning as defined in the Illinois Credit Card and Debit Card Act. (Source: P.A. 87‑382.)