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The Vermont Statutes Online



Title

09A

:
Uniform Commercial Code






Chapter

004

:
Bank Deposits and Collections











 

§

4-302. Payor bank's responsibility for late return of item

(a) If an item

is presented to and received by a payor bank, the bank is accountable for the

amount of:

(1) a demand

item, other than a documentary draft, whether properly payable or not, if the

bank, in any case in which it is not also the depositary bank, retains the item

beyond midnight of the banking day of receipt without settling for it or,

whether or not it is also the depositary bank, does not pay or return the item

or send notice of dishonor until after its midnight deadline; or

(2) any other

properly payable item unless, within the time allowed for acceptance or payment

of that item, the bank either accepts or pays the item or returns it and

accompanying documents.

(b) The

liability of a payor bank to pay an item pursuant to subsection (a) of this

section is subject to defenses based on breach of a presentment warranty (§

4-208) or proof that the person seeking enforcement of the liability presented

or transferred the item for the purpose of defrauding the payor bank. (Added

1993, No. 158 (Adj. Sess.), § 13, eff. Jan. 1, 1995.)