§490:4-202  Responsibility for collection or
return; when action timely.  (a)  A collecting bank must exercise ordinary
care in:



(1)  Presenting an item or sending it for presentment;



(2)  Sending notice of dishonor or nonpayment or
returning an item other than a documentary draft to the bank's transferor after
learning that the item has not been paid or accepted, as the case may be;



(3)  Settling for an item when the bank receives final
settlement; and



(4)  Notifying its transferor of any loss or delay in
transit within a reasonable time after discovery thereof.



(b)  A collecting bank exercises ordinary care
under subsection (a) by taking proper action before its midnight deadline
following receipt of an item, notice, or settlement.  Taking proper action within
a reasonably longer time may constitute the exercise of ordinary care, but the
bank has the burden of establishing timeliness.



(c)  Subject to subsection (a)(1), a bank is
not liable for the insolvency, neglect, misconduct, mistake, or default of another
bank or person or for loss or destruction of an item in the possession of
others or in transit. [L 1965, c 208, §4-202; HRS §490:4-202; am L 1991, c 118,
pt of §4]