Terms Used In New Jersey Statutes 12A:4-301

  • 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
  • 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 New Jersey Statutes 12A:4-104
  • Clearing house: means an association of banks or other payors regularly clearing items. See New Jersey Statutes 12A:4-104
  • 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
  • Documentary draft: means a draft to be presented for acceptance or payment if specified documents, certificated securities (12A:8-102) or instructions for uncertificated securities (12A:8-102), 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 New Jersey Statutes 12A:4-104
  • 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
  • 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 payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter before midnight of the banking day of receipt, the payor bank may revoke the settlement and recover the settlement if, before it has made final payment and before its midnight deadline, it

(1) returns the item; or

(2) sends written notice of dishonor or nonpayment if the item is unavailable for return.

b. If a demand item is received by a payor bank for credit on its books, it may return the item or send notice of dishonor and may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in subsection a. of this section.

c. Unless previous notice of dishonor has been sent, an item is dishonored at the time when for purposes of dishonor it is returned or a notice is sent in accordance with this section.

d. An item is returned:

(1) as to an item presented through a clearing house, when it is delivered to the presenting or last collecting bank or to the clearing house or is sent or delivered in accordance with clearing-house rules; or

(2) in all other cases, when it is sent or delivered to the bank’s customer or transferor or pursuant to instructions.

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

  Previous section
Next section  
 Chapter 4 Contents