Payor Bank's Responsibility for Late Return of Item

1. Law
2. Georgia Code
3. Commercial Code
4. Bank Deposits and Collections
5. Collection of Items: Payor Banks
6. Payor Bank's Responsibility for Late Return of Item

1. If an item is presented to and received by a payor bank, the bank is accountable for the amount of:
   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 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
   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.
2. The liability of a payor bank to pay an item pursuant to subsection (a) of this Code section is subject to defenses based on breach of a presentment warranty (Code Section 11-4-208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.

(Code 1933, § 109A-4 - 302, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 1996, p. 1306, § 12.)

RESEARCH REFERENCES

Am. Jur. 2d.

- 10 Am. Jur. 2d, Banks and Financial Institutions, §§ 770, 779 et seq. 11 Am. Jur. 2d, Banks and Financial Institutions, §§ 941, 990. 11 Am. Jur. 2d, Bills and Notes, §§ 341 et seq., 368, 373, 380.

C.J.S.

- 9 C.J.S., Banks and Banking, §§ 328 et seq., 397 et seq.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 4-302.

ALR.

- Duty of bank taking bill or note for collection to see that it is returned if not paid, 6 A.L.R. 618.

Construction and effect of UCC §§ 4-301 and 4-302 making payor bank accountable for failure to act promptly on item presented for payment, 22 A.L.R.4th 10.

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