PART 5.  COLLECTION OF DOCUMENTARY DRAFTS

 

     §490:4-501  Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor.  A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and, upon learning that the draft has not been paid or accepted in due course, shall seasonably notify its customer of such fact even though it may have discounted or bought the draft or extended credit available for withdrawal as of right. [L 1965, c 208, §4-501; HRS §490:4-501; am L 1991, c 118, pt of §4]

 

COMMENTS TO OFFICIAL TEXT

 

  Prior Uniform Statutory Provision:  None.

  Purposes:

  To state the duty of a bank handling a documentary draft for a customer.  "Documentary draft" is defined in Section 4-104.  Notice that the duty stated exists even when the bank has bought the draft.  This is because to the customer the draft normally represents an underlying commercial transaction, and if that is not going through as planned he should know it promptly.

  Cross References:

  In Article 4:  Sections 4-201, 4-202, 4-203, 4-204 and 4-210.

  In Article 5:  Sections 5-110, 5-111, 5-112 and 5-113.

  Definitional Cross References:

  "Documentary draft".  Sections 4-104, 5-103.