Kentucky Statutes 355.4-303 – When items subject to notice, stop-payment order, legal process, or setoff — Order in which items may be charged or certified
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(1) 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:
(a) The bank accepts or certifies the item; (b) The bank pays the item in cash;
(c) The bank settles for the item without having a right to revoke the settlement under statute, clearing-house rule, or agreement;
(d) The bank becomes accountable for the amount of the item under KRS § 355.4-
302 dealing with the payor bank’s responsibility for late return of items; or
(e) With respect to checks, a cutoff hour no earlier than one (1) 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.
(2) Subject to subsection (1), items may be accepted, paid, certified, or charged to the indicated account of its customer in any order.
Effective: January 1, 1997
History: Amended 1996 Ky. Acts ch. 130, sec. 101, effective January 1, 1997. — Created 1958 Ky. Acts ch. 77, sec. 4-303, effective July 1, 1960.
(a) The bank accepts or certifies the item; (b) The bank pays the item in cash;
Terms Used In Kentucky Statutes 355.4-303
- 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. See Kentucky Statutes 355.4-104
- Customer: means a person having an account with a bank or for whom a bank has agreed to collect items including a bank that maintains an account at another bank. See Kentucky Statutes 355.4-104
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See Kentucky Statutes 355.4-104
- 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.
- Statute: A law passed by a legislature.
(c) The bank settles for the item without having a right to revoke the settlement under statute, clearing-house rule, or agreement;
(d) The bank becomes accountable for the amount of the item under KRS § 355.4-
302 dealing with the payor bank’s responsibility for late return of items; or
(e) With respect to checks, a cutoff hour no earlier than one (1) 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.
(2) Subject to subsection (1), items may be accepted, paid, certified, or charged to the indicated account of its customer in any order.
Effective: January 1, 1997
History: Amended 1996 Ky. Acts ch. 130, sec. 101, effective January 1, 1997. — Created 1958 Ky. Acts ch. 77, sec. 4-303, effective July 1, 1960.