4301. (a) 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 the settlement if, before
it has made final payment and before its midnight deadline, it
either:
(1) Returns the item.
(2) Sends written notice of dishonor or nonpayment if the item is
unavailable for return.
(b) 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revoke any credit given or recover the amount thereof withdrawn by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 subdivision (a).
(c) 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.
(d) An item is returned either:
(1) As to an item presented through a clearing house, when it is
delivered to the presenting or last collecting bank or to the
clearing house or is sent or delivered in accordance with clearing
house rules.
(2) In all other cases, when it is sent or delivered to the bank's
customer or transferor or pursuant to his instructions.
4302. (a) If an item is presented to and received by a payor bank,
the bank is accountable for the amount of either:
(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.
(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
subdivision (a) is subject to defenses based on breach of a
presentment warranty (Section 4208) or proof that the person seeking
enforcement of the liability presented or transferred the item for
the purpose of defrauding the payor bank.
4303. (a) Any knowledge, notice, or stop-payment order received by,
legal process served upon, or setoff exercised by a payor bank comes
too late to terminate, suspend, or modify the bank's right or duty
to pay an item or to charge its customer's account for the item if
the knowledge, notice, stop-payment order, or legal process is
received or served and a reasonable time for the bank to act thereon
expires or the setoff is exercised after the earliest of the
following:
(1) The bank accepts or certifies the item.
(2) The bank pays the item in cash.
(3) The bank settles for the item without having a right to revoke
the settlement under statute, clearing house rule, or agreement.
(4) The bank becomes accountable for the amount of the item under
Section 4302 dealing with the payor bank's responsibility for late
return of items.
(5) With respect to checks, a cutoff hour no earlier than one hour
after the opening of the next banking day after the banking day on
which the bank received the check and no later than the close of that
next banking day or, if no cutoff hour is fixed, the close of the
next banking day after the banking day on which the bank received the
check.
(b) Subject to subdivision (a), items may be accepted, paid,
certified, or charged to the indicated account of its customer in any
order.
4301. (a) 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 the settlement if, before
it has made final payment and before its midnight deadline, it
either:
(1) Returns the item.
(2) Sends written notice of dishonor or nonpayment if the item is
unavailable for return.
(b) 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 subdivision (a).
(c) 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.
(d) An item is returned either:
(1) As to an item presented through a clearing house, when it is
delivered to the presenting or last collecting bank or to the
clearing house or is sent or delivered in accordance with clearing
house rules.
(2) In all other cases, when it is sent or delivered to the bank's
customer or transferor or pursuant to his instructions.
4302. (a) If an item is presented to and received by a payor bank,
the bank is accountable for the amount of either:
(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.
(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
subdivision (a) is subject to defenses based on breach of a
presentment warranty (Section 4208) or proof that the person seeking
enforcement of the liability presented or transferred the item for
the purpose of defrauding the payor bank.
4303. (a) Any knowledge, notice, or stop-payment order received by,
legal process served upon, or setoff exercised by a payor bank comes
too late to terminate, suspend, or modify the bank's right or duty
to pay an item or to charge its customer's account for the item if
the knowledge, notice, stop-payment order, or legal process is
received or served and a reasonable time for the bank to act thereon
expires or the setoff is exercised after the earliest of the
following:
(1) The bank accepts or certifies the item.
(2) The bank pays the item in cash.
(3) The bank settles for the item without having a right to revoke
the settlement under statute, clearing house rule, or agreement.
(4) The bank becomes accountable for the amount of the item under
Section 4302 dealing with the payor bank's responsibility for late
return of items.
(5) With respect to checks, a cutoff hour no earlier than one hour
after the opening of the next banking day after the banking day on
which the bank received the check and no later than the close of that
next banking day or, if no cutoff hour is fixed, the close of the
next banking day after the banking day on which the bank received the
check.
(b) Subject to subdivision (a), items may be accepted, paid,
certified, or charged to the indicated account of its customer in any
order.
4301. (a) 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 the settlement if, before
it has made final payment and before its midnight deadline, it
either:
(1) Returns the item.
(2) Sends written notice of dishonor or nonpayment if the item is
unavailable for return.
(b) 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 subdivision (a).
(c) 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.
(d) An item is returned either:
(1) As to an item presented through a clearing house, when it is
delivered to the presenting or last collecting bank or to the
clearing house or is sent or delivered in accordance with clearing
house rules.
(2) In all other cases, when it is sent or delivered to the bank's
customer or transferor or pursuant to his instructions.
4302. (a) If an item is presented to and received by a payor bank,
the bank is accountable for the amount of either:
(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.
(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
subdivision (a) is subject to defenses based on breach of a
presentment warranty (Section 4208) or proof that the person seeking
enforcement of the liability presented or transferred the item for
the purpose of defrauding the payor bank.
4303. (a) Any knowledge, notice, or stop-payment order received by,
legal process served upon, or setoff exercised by a payor bank comes
too late to terminate, suspend, or modify the bank's right or duty
to pay an item or to charge its customer's account for the item if
the knowledge, notice, stop-payment order, or legal process is
received or served and a reasonable time for the bank to act thereon
expires or the setoff is exercised after the earliest of the
following:
(1) The bank accepts or certifies the item.
(2) The bank pays the item in cash.
(3) The bank settles for the item without having a right to revoke
the settlement under statute, clearing house rule, or agreement.
(4) The bank becomes accountable for the amount of the item under
Section 4302 dealing with the payor bank's responsibility for late
return of items.
(5) With respect to checks, a cutoff hour no earlier than one hour
after the opening of the next banking day after the banking day on
which the bank received the check and no later than the close of that
next banking day or, if no cutoff hour is fixed, the close of the
next banking day after the banking day on which the bank received the
check.
(b) Subject to subdivision (a), items may be accepted, paid,
certified, or charged to the indicated account of its customer in any
order.
