70A-4-301 - Deferred posting -- Recovery of payment by return of items -- Time of dishonor -- Return of item by payor bank.
70A-4-301. Deferred posting -- Recovery of payment by return of items -- Time ofdishonor -- Return of item by payor bank.
(1) If a payor bank settles for a demand item, other than a documentary draft presentedotherwise than for immediate payment over the counter before midnight of the banking day ofreceipt, the payor bank may revoke the settlement and recover if, before it has made finalpayment and before its midnight deadline, it:
(a) returns the item; or
(b) sends written notice of dishonor or nonpayment if the item is unavailable for return.
(2) If a demand item is received by a payor bank for credit on its books, it may return theitem or send notice of dishonor and may revoke any credit given or recover the amount thereofwithdrawn by its customer, if it acts within the time limit and in the manner specified inSubsection (1).
(3) Unless previous notice of dishonor has been sent an item is dishonored at the timewhen for purposes of dishonor it is returned or notice sent in accordance with this section.
(4) An item is returned:
(a) as to an item presented through a clearinghouse, when it is delivered to the presentingor last collecting bank or to the clearinghouse or is sent or delivered in accordance withclearinghouse rules; or
(b) in all other cases, when it is sent or delivered to the bank's customer or transferor orpursuant to his instructions.
Amended by Chapter 237, 1993 General Session