Terms Used In New Jersey Statutes 12A:4-214

  • Account: means any deposit or credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit. See New Jersey Statutes 12A:4-104
  • Bank: means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union, or trust company. See New Jersey Statutes 12A:4-105
  • Collecting bank: means a bank handling an item for collection except the payor bank. See New Jersey Statutes 12A:4-105
  • Customer: means a person having an account with a bank or for whom a bank has agreed to collect items, including a bank that maintains an account at another bank. See New Jersey Statutes 12A:4-104
  • Depositary bank: means the first bank to take an item even though it is also the payor bank, unless the item is presented for immediate payment over the counter. See New Jersey Statutes 12A:4-105
  • Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See New Jersey Statutes 12A:4-104
  • Payor bank: means a bank that is the drawee of a draft. See New Jersey Statutes 12A:4-105
  • person: includes corporations, companies, associations, societies, firms, partnerships and joint stock companies as well as individuals, unless restricted by the context to an individual as distinguished from a corporate entity or specifically restricted to one or some of the above enumerated synonyms and, when used to designate the owner of property which may be the subject of an offense, includes this State, the United States, any other State of the United States as defined infra and any foreign country or government lawfully owning or possessing property within this State. See New Jersey Statutes 1:1-2
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
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 items, 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 (12A: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 must 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.

L.1995,c.28,s.2.

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