70A-4-503 - Responsibility of presenting bank for documents and goods -- Report of reasons for dishonor -- Referee in case of need.
70A-4-503. Responsibility of presenting bank for documents and goods -- Reportof reasons for dishonor -- Referee in case of need.
(1) Unless otherwise instructed and except as provided in Title 70A, Chapter 5, UniformCommercial Code -- Letters of Credit a bank presenting a documentary draft:
(a) must deliver the documents to the drawee on acceptance of the draft if it is payablemore than three days after presentment, otherwise, only on payment; and
(b) upon dishonor, either in the case of presentment for acceptance or presentment forpayment, may seek and follow instructions from any referee in case of need designated in thedraft, or if the presenting bank does not choose to utilize the referee's services, it must usediligence and good faith to ascertain the reason for dishonor, must notify its transferor of thedishonor and of the results of its effort to ascertain the reasons therefor, and must requestinstructions.
(2) However, the presenting bank is under no obligation with respect to goodsrepresented by the documents except to follow any reasonable instructions seasonably received; ithas a right to reimbursement for any expense incurred in following instructions and to prepaymentof or indemnity for those expenses.
Amended by Chapter 237, 1993 General Session