47-4302. 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 of this
section is subject to defenses based on breach of a presentment warranty (section
47-4208) or proof that the person seeking enforcement of the liability presented or
transferred the item for the purpose of defrauding the payor bank.
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