N.Y. Uniform Commercial Code 4-303 – When Items Subject to Notice, Stop-Order, Legal Process or Setoff; Order in Which Items May Be Charged or Certified
Section 4–303. When Items Subject to Notice, Stop-Order, Legal Process
Terms Used In N.Y. Uniform Commercial Code 4-303
- Account: means any account with a bank and includes a
checking, time, interest or savings account;
(b) "Afternoon" means the period of a day between noon and
midnight;
(c) "Banking day" means that part of any day on which a bank is
open to the public for carrying on substantially all of its
banking functions;
(d) "Clearing house" means any association of banks or other
payors regularly clearing items;
(e) "Customer" means any person having an account with a bank or
for whom a bank has agreed to collect items and includes a
bank carrying an account with another bank;
(f) "Documentary draft" means any negotiable or non-negotiable
draft with accompanying documents, securities or other papers
to be delivered against honor of the draft;
(g) "Item" means any instrument for the payment of money even
though it is not negotiable but does not include money;
(h) "Midnight deadline" with respect to a bank is midnight on its
next banking day following the banking day on which it
receives the relevant item or notice or from which the time
for taking action commences to run, whichever is later;
(i) "Obligated bank" means the acceptor of a certified check, the
issuer of a cashier's check, or the drawer of a teller's
check;
(j) "Properly payable" includes the availability of funds for
payment at the time of decision to pay or dishonor;
(k) "Remitter" means the buyer from the obligated bank of a
cashier's check or a teller's check, and the drawer of a
certified check;
(l) "Settle" means to pay in cash, by clearing house settlement,
in a charge or credit or by remittance, or otherwise as
instructed. See N.Y. Uniform Commercial Code 4-104 - 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.
- Statute: A law passed by a legislature.
or Setoff; Order in Which Items May Be Charged or
Certified.
(1) Any knowledge, notice or stop-order received by, legal process served upon or setoff exercised by a payor bank, whether or not effective under other rules of law to terminate, suspend or modify the bank's right or duty to pay an item or to charge its customer's account for the item, comes too late to so terminate, suspend or modify such right or duty if the knowledge, notice, stop-order or legal process is received or served and a reasonable time for the bank to act thereon expires or the setoff is exercised after the bank has done any of the following:
(a) accepted or certified the item;
(b) paid the item in cash;
(c) settled for the item without reserving a right to revoke the
settlement and without having such right under statute,
clearing house rule or agreement;
(d) completed the process of posting the item to the indicated
account of the drawer, maker or other person to be charged
therewith or otherwise has evidenced by examination of such
indicated account and by action its decision to pay the item;
or
(e) become accountable for the amount of the item under
subsection (1) (d) of Section 4–213 and Section 4–302
dealing with the payor bank's responsibility for late return
of items.
(2) Subject to the provisions of subsection (1) items may be accepted, paid, certified or charged to the indicated account of its customer in any order convenient to the bank.