Montana Code 30-4-212. Right of charge-back or refund — liability of collecting bank — return of item
30-4-212. Right of charge-back or refund — liability of collecting bank — return of item. (1) If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank or otherwise to receive settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge back the amount of any credit given for the item to its customer’s account or obtain refund from its customer, whether or not it is able to return the items if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank’s midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit, or obtain refund from its customer but is liable for any loss resulting from the delay. These rights to revoke, charge back and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final (subsections (3) and (4) of 30-4-211 and subsections (2) and (3) of 30-4-213).
Terms Used In Montana Code 30-4-212
- account: means any deposit or credit account with a bank and includes a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit;
(b)"afternoon" means the period of a day between noon and midnight;
(c)"banking day" means the part of a day on which a bank is open to the public for carrying on substantially all of its banking functions;
(d)"clearinghouse" means an association of banks or other payors regularly clearing items;
(e)"customer" means a person having an account with a bank or for whom a bank has agreed to collect items and includes a bank maintaining an account at another bank;
(f)"documentary draft" means a draft to be presented for acceptance or payment if specified documents, certificated securities (30-8-112) or instructions for uncertificated securities (30-8-112), or other certificates, statements, or the like are to be received by the drawee or other payor before acceptance or payment of the draft;
(g)"draft" means a draft as defined in 30-3-104 or an item, other than an instrument, that is an order;
(h)"item" means an instrument or a promise or an order to pay money handled by a bank for collection or payment. See Montana Code 30-4-104
- bank: means any person engaged in the business of banking, including a savings bank, savings and loan association, credit union, or trust company;
(2)"depositary bank" means the first bank to take an item even though it is also the payor bank, unless the item is presented for immediate payment over the counter;
(3)"payor bank" means a bank that is the drawee of a draft;
(4)"intermediary bank" means a bank to which an item is transferred in course of collection except the depositary or payor bank;
(5)"collecting bank" means a bank handling an item for collection except the payor bank;
(6)"presenting bank" means a bank presenting an item except a payor bank. See Montana Code 30-4-105
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(2)A collecting bank returns an item when it is sent or delivered to the bank’s customer or transferor or pursuant to its instructions.
(3)A depositary bank which is also the payor may charge back the amount of an item to its customer’s account or obtain refund in accordance with the section governing return of an item received by a payor bank for credit on its books (30-4-301).
(4)The right to charge back is not affected by:
(a)previous use of a credit given for the item; or
(b)failure by any bank to exercise ordinary care with respect to the item but any bank so failing remains liable.
(5)A failure to charge back or claim refund does not affect other rights of the bank against the customer or any other party.
(6)If credit is given in dollars as the equivalent of the value of an item payable in foreign money, the dollar amount of any charge-back or refund must be calculated on the basis of the bank-offered spot rate for the foreign money prevailing on the day when the person entitled to the charge-back or refund learns that it will not receive payment in ordinary course.