§490:4-302 Payor bank's responsibility for late return of item. (a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of:
(1) A demand item, other than a documentary draft, whether properly payable or not, if the bank, in any case in which it is not also the depositary bank, retains the item beyond midnight of the banking day of receipt without settling for it or, whether or not it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline; or
(2) Any other properly payable item unless, within the time allowed for acceptance or payment of that item, the bank either accepts or pays the item or returns it and accompanying documents.
(b) The liability of a payor bank to pay an item pursuant to subsection (a) is subject to defenses based on breach of a presentment warranty (section 490:4-208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank. [L 1965, c 208, §4-302; HRS §490:4-302; am L 1991, c 118, pt of §4]
COMMENTS TO OFFICIAL TEXT
Prior Uniform Statutory Provision: None; but see American Bankers Association Model Deferred Posting Statute.
Purposes:
Under Section 4-301, time limits are prescribed within which a payor bank must take action if it receives an item payable by it. Section 4-302 states the rights of the customer if the payor bank fails to take the action required within the time limits prescribed.
Cross References:
Section 4-301.
Definitional Cross References:
"Acceptance". Section 3-410.
"Banking day". Section 4-104.
"Customer". Section 4-104.
"Depositary bank". Section 4-105.
"Documentary draft". Section 4-104.
"Item". Section 4-104.
"Midnight deadline". Section 4-104.
"Notice of dishonor". Section 3-508.
"Payor bank". Section 4-105.
"Properly payable". Section 4-104.
"Settle". Section 4-104.