§4-202. Responsibility for collection or return; when action timely

Link to law: http://legislature.vermont.gov/statutes/section/09A/004/00202
Published: 2015

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The Vermont Statutes Online



Uniform Commercial Code



Bank Deposits and Collections



4-202. Responsibility for collection or return; when action timely

(a) A collecting

bank must exercise ordinary care in:

(1) presenting

an item or sending it for presentment;

(2) sending

notice of dishonor or nonpayment or returning an item other than a documentary

draft to the bank's transferor after learning that the item has not been paid

or accepted, as the case may be;

(3) settling for

an item when the bank receives final settlement; and

(4) notifying

its transferor of any loss or delay in transit within a reasonable time after

discovery thereof.

(b) A collecting

bank exercises ordinary care under subsection (a) of this section by taking

proper action before its midnight deadline following receipt of an item,

notice, or settlement. Taking proper action within a reasonably longer time may

constitute the exercise of ordinary care, but the bank has the burden of

establishing timeliness.

(c) Subject to

subsection (a)(1)of this section, a bank is not liable for the insolvency,

neglect, misconduct, mistake, or default of another bank or person or for loss

or destruction of an item in the possession of others or in transit. (Added

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