Kentucky Statutes 355.4-302 – Payor bank’s responsibility for late return of item
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(1) If an item is presented to and received by a payor bank the bank, is accountable for the amount of:
(a) 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
(b) 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.
(2) The liability of a payor bank to pay an item pursuant to subsection (1) of this section is subject to defenses based on breach of a presentment warranty (KRS 355.4-208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.
Effective: January 1, 1997
History: Amended 1996 Ky. Acts ch. 130, sec. 100, effective January 1, 1997. — Created 1958 Ky. Acts ch. 77, sec. 4-302, effective July 1, 1960.
(a) 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
Terms Used In Kentucky Statutes 355.4-302
- 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
- Documentary draft: means a draft to be presented for acceptance or payment if specified documents, certificated securities (KRS §. 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
(b) 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.
(2) The liability of a payor bank to pay an item pursuant to subsection (1) of this section is subject to defenses based on breach of a presentment warranty (KRS 355.4-208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.
Effective: January 1, 1997
History: Amended 1996 Ky. Acts ch. 130, sec. 100, effective January 1, 1997. — Created 1958 Ky. Acts ch. 77, sec. 4-302, effective July 1, 1960.