California Commercial Code 4302 – (a) If an item is presented to and received by a payor bank, the …
(a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of either:
(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.
Terms Used In California Commercial Code 4302
- Bank: means a person engaged in the business of banking, and includes a savings bank, savings and loan association, credit union, and trust company. See California Commercial Code 1201
- Banking day: means the part of a day on which a bank is open to the public for carrying on substantially all of its banking functions. See California Commercial Code 4104
- Documentary draft: means a draft to be presented for acceptance or payment if specified documents, certificated securities (Section 8102) or instructions for uncertificated securities (Section 8102), or other certificates, statements, or the like are to be received by the drawee or other payor before acceptance or payment of the draft. See California Commercial Code 4104
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See California Commercial Code 4104
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See California Commercial Code 1201
(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 subdivision (a) is subject to defenses based on breach of a presentment warranty (Section 4208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.
(Amended by Stats. 1992, Ch. 914, Sec. 38. Effective January 1, 1993.)