| (1) |
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 if, before it has made final payment and before its midnight deadline, it:
Terms Used In Utah Code 70A-4-301- 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 other than a Saturday, a Sunday, or a legal holiday. See Utah Code 70A-4-104
- Clearinghouse: means an association of banks or other payors regularly clearing items. See Utah Code 70A-4-104
- 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 Utah Code 70A-4-104
- Documentary draft: means a draft to be presented for acceptance or payment if specified documents, certificated securities as provided in Section 70A-8-101, instructions for uncertificated securities as provided in Section 70A-8-101, other certificates, statements, or the like are to be received by the drawee or other payor before acceptance or payment of the draft. See Utah Code 70A-4-104
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See Utah Code 70A-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.
| (a) |
returns the item; or |
| (b) |
sends written notice of dishonor or nonpayment if the item is unavailable for return. |
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| (2) |
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books, it may return the item or send notice of dishonor and may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in Subsection (1). |
| (3) |
Unless previous notice of dishonor has been sent an item is dishonored at the time when for purposes of dishonor it is returned or notice sent in accordance with this section. |
| (4) |
An item is returned:
| (a) |
as to an item presented through a clearinghouse, when it is delivered to the presenting or last collecting bank or to the clearinghouse or is sent or delivered in accordance with clearinghouse rules; or |
| (b) |
in all other cases, when it is sent or delivered to the bank’s customer or transferor or pursuant to his instructions. |
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Amended by Chapter 237, 1993 General Session
