(a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of:

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Terms Used In Tennessee Code 47-4-302

  • 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, except that any day that is not a banking day for purposes of federal reserve regulations, Regulation CC (12 C. See Tennessee Code 47-4-104
  • Documentary draft: means a draft to be presented for acceptance or payment if specified documents, certificated securities (§. See Tennessee Code 47-4-104
  • Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See Tennessee Code 47-4-104
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
(1) 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 (12:00 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 (12:00 midnight) deadline; or
(2) 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.
(b) The liability of a payor bank to pay an item pursuant to subsection (a) is subject to defenses based on breach of a presentment warranty (§ 47-4-208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.
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