Kentucky Statutes 355.4-503 – Responsibility of presenting bank for documents and goods — Report of reasons for dishonor — Referee in case of need
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Unless otherwise instructed and except as provided in Article 5 of this chapter, a bank presenting a documentary draft:
(1) Must deliver the documents to the drawee on acceptance of the draft if it is payable more than three (3) days after presentment; otherwise, only on payment; and
(2) Upon dishonor, either in the case of presentment for acceptance or presentment for payment, may seek and follow instructions from any referee in case of need designated in the draft or, if the presenting bank does not choose to utilize the referee’s services, it must use diligence and good faith to ascertain the reason for dishonor, must notify its transferor of the dishonor and of the results of its efforts to ascertain the reasons therefor, and must request instructions.
However, the presenting bank is under no obligation with respect to goods represented by the documents except to follow any reasonable instructions seasonably received; it has a right to reimbursement for any expense incurred in following instructions and to prepayment of or indemnity for those expenses.
Effective: January 1, 1997
History: Amended 1996 Ky. Acts ch. 130, sec. 110, effective January 1, 1997 — Created 1958 Ky. Acts ch. 77, sec. 4-503, effective July 1, 1960.
(1) Must deliver the documents to the drawee on acceptance of the draft if it is payable more than three (3) days after presentment; otherwise, only on payment; and
Terms Used In Kentucky Statutes 355.4-503
- Documentary draft: means a draft to be presented for acceptance or payment if specified documents, certificated securities (KRS §. See Kentucky Statutes 355.4-104
- Draft: means a draft as defined in KRS §. See Kentucky Statutes 355.4-104
- Drawee: means a person ordered in a draft to make payment. See Kentucky Statutes 355.4-104
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(2) Upon dishonor, either in the case of presentment for acceptance or presentment for payment, may seek and follow instructions from any referee in case of need designated in the draft or, if the presenting bank does not choose to utilize the referee’s services, it must use diligence and good faith to ascertain the reason for dishonor, must notify its transferor of the dishonor and of the results of its efforts to ascertain the reasons therefor, and must request instructions.
However, the presenting bank is under no obligation with respect to goods represented by the documents except to follow any reasonable instructions seasonably received; it has a right to reimbursement for any expense incurred in following instructions and to prepayment of or indemnity for those expenses.
Effective: January 1, 1997
History: Amended 1996 Ky. Acts ch. 130, sec. 110, effective January 1, 1997 — Created 1958 Ky. Acts ch. 77, sec. 4-503, effective July 1, 1960.