Utah Code 70A-4-503. Responsibility of presenting bank for documents and goods — Report of reasons for dishonor — Referee in case of need
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(1) Unless otherwise instructed and except as provided in Title 70A, Chapter 5, Uniform Commercial Code – Letters of Credit , a bank presenting a documentary draft:
Terms Used In Utah Code 70A-4-503
- 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 Section70A-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 - Draft: means a draft as defined in Section
70A-3-104 or an item, other than an instrument, that is an order. See Utah Code 70A-4-104 - Drawee: means a person ordered in a draft to make payment. See Utah Code 70A-4-104
- 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.
- Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
(1)(a) must 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; and
(1)(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 must use diligence and good faith to ascertain the reason for dishonor, must notify its transferor of the dishonor and of the results of its effort to ascertain the reasons therefor, and must request instructions.
(2) 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.