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The Vermont Statutes Online



Title

09A

:
Uniform Commercial Code






Chapter

004

:
Bank Deposits and Collections











 

§

4-214. Right of charge-back or refund; liability of collecting bank; return of

item

(a) If a

collecting bank has made provisional settlement with its customer for an item

and fails by reason of dishonor, suspension of payments by a bank, or otherwise

to receive settlement for the item which is or becomes final, the bank may

revoke the settlement given by it, charge back the amount of any credit given

for the item to its customer's account, or obtain refund from its customer,

whether or not it is able to return the item, if by its midnight deadline or

within a longer reasonable time after it learns the facts it returns the item

or sends notification of the facts. If the return or notice is delayed beyond

the bank's midnight deadline or a longer reasonable time after it learns the

facts, the bank may revoke the settlement, charge back the credit, or obtain

refund from its customer, but it is liable for any loss resulting from the

delay. These rights to revoke, charge back, and obtain refund terminate if and

when a settlement for the item received by the bank is or becomes final.

(b) A collecting

bank returns an item when it is sent or delivered to the bank's customer or

transferor or pursuant to its instructions.

(c) A depositary

bank that is also the payor may charge back the amount of an item to its

customer's account or obtain refund in accordance with the section governing

return of an item received by a payor bank for credit on its books (§ 4-301).

(d) The right to

charge back is not affected by:

(1) previous use

of a credit given for the item; or

(2) failure by

any bank to exercise ordinary care with respect to the item, but a bank so

failing remains liable.

(e) A failure to

charge back or claim refund does not affect other rights of the bank against the

customer or any other party.

(f) If credit is

given in dollars as the equivalent of the value of an item payable in foreign

money, the dollar amount of any charge-back or refund shall be calculated on

the basis of the bank-offered spot rate for the foreign money prevailing on the

day when the person entitled to the charge-back or refund learns that it will

not receive payment in ordinary course. (Added 1993, No. 158 (Adj. Sess.), §

13, eff. Jan. 1, 1995.)