California Commercial Code 4503 – Unless otherwise instructed and except as provided in Division 5 …
Unless otherwise instructed and except as provided in Division 5 (commencing with Section 5101), a bank presenting a documentary draft:
(a) Shall deliver the documents to the drawee on acceptance of the draft if it is payable more than three days after presentment; otherwise, only on payment.
Terms Used In California Commercial Code 4503
- 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
- 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
- Draft: means a draft as defined in Section 3104 or an item, other than an instrument, that is an order. See California Commercial Code 4104
- Drawee: means a person ordered in a draft to make payment. See California Commercial Code 4104
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Right: includes remedy. See California Commercial Code 1201
(b) Upon dishonor, either in the case of presentment for acceptance or presentment for payment, may seek and follow instructions from any referee in case of need designated in the draft or, if the presenting bank does not choose to utilize the referee’s services, it shall use diligence and good faith to ascertain the reason for dishonor, shall notify its transferor of the dishonor and of the results of its effort to ascertain the reasons therefor, and shall request instructions.
However, the presenting bank is under no obligation with respect to goods represented by the documents except to follow any reasonable instructions seasonably received; it has a right to reimbursement for any expense incurred in following instructions and to prepayment of or indemnity for those expenses.
(Amended by Stats. 1992, Ch. 914, Sec. 49. Effective January 1, 1993.)