Virginia Code 8.4-503: Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of need
Unless otherwise instructed and except as provided in Title 8.5A, a bank presenting a documentary draft:
Terms Used In Virginia Code 8.4-503
- Draft: means a draft as defined in § Virginia Code 8.4-104
- Drawee: means a person ordered in a draft to make payment;
(9) "Item" means an instrument or a promise or order to pay money handled by a bank for collection or payment. See Virginia Code 8.4-104
- 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.
(1) must deliver the documents to the drawee on acceptance of the draft if it is payable more than three 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 effort 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.
1964, c. 219; 1992, c. 693.