70A-3-502 - Dishonor.
70A-3-502. Dishonor.
(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 madeto the maker and the note is not paid on the day of presentment.
(b) If the note is not payable on demand and is payable at or through a bank or the termsof the note require presentment, the note is dishonored if presentment is duly made and the noteis not paid on the day it becomes payable or the day of presentment, whichever is later.
(c) If the note is not payable on demand and Subsection (1)(b) does not apply, the note isdishonored if it is not paid on the day it becomes payable.
(2) Dishonor of an unaccepted draft other than a documentary draft is governed by thefollowing rules:
(a) If a check is duly presented for payment to the payor bank otherwise than forimmediate payment over the counter, the check is dishonored if the payor bank makes timelyreturn of the check or sends timely notice of dishonor or nonpayment under Section 70A-4-301or 70A-4-302, or becomes accountable for the amount of the check under Section 70A-4-302.
(b) If a draft is payable on demand and Subsection (2)(a) does not apply, the draft isdishonored if presentment for payment is duly made to the drawee and the draft is not paid on theday of presentment.
(c) If a draft is payable on a date stated in the draft, the draft is dishonored if presentmentfor payment is duly made to the drawee and payment is not made on the day the draft becomespayable or the day of presentment, whichever is later, or presentment for acceptance is duly madebefore the day the draft becomes payable and the draft is not accepted on the day of presentment.
(d) If a draft is payable on elapse of a period of time after sight or acceptance, the draft isdishonored if presentment for acceptance is duly made and the draft is not accepted on the day ofpresentment.
(3) Dishonor of an unaccepted documentary draft occurs according to the rules stated inSubsections (2)(b), (c), and (d), except that payment or acceptance may be delayed withoutdishonor until no later than the close of the third business day of the drawee following the day onwhich payment or acceptance is required by those subsections.
(4) Dishonor of an accepted draft is governed by the following rules:
(a) If the draft is payable on demand, the draft is dishonored if presentment for paymentis duly made to the acceptor and the draft is not paid on the day of presentment.
(b) If the draft is not payable on demand, the draft is dishonored if presentment forpayment is duly made to the acceptor and payment is not made on the day it becomes payable orthe day of presentment, whichever is later.
(5) In any case in which presentment is otherwise required for dishonor under thissection and presentment is excused under Section 70A-3-504, dishonor occurs withoutpresentment if the instrument is not duly accepted or paid.
(6) If a draft is dishonored because timely acceptance of the draft was not made and theperson entitled to demand acceptance consents to a late acceptance, from the time of acceptancethe draft is treated as never having been dishonored.
Amended by Chapter 324, 2010 General Session