§490:4-302 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) is subject to defenses based on breach of a
presentment warranty (section 490:4-208) or proof that the person seeking
enforcement of the liability presented or transferred the item for the purpose
of defrauding the payor bank. [L 1965, c 208, §4-302; HRS §490:4-302; am L
1991, c 118, pt of §4]