(a)Dishonor of a note is governed by the following rules:
(1)If the note is payable on demand, the note is dishonored if presentment is
duly made to the maker and the note is not paid on the day of presentment.
(2)If the note is not payable on demand and is payable at or through a bank
or the terms of the note require presentment, the note is dishonored if presentment
is duly made and the note is not paid on the day it becomes payable or the day of
presentment, whichever is later.
(3)If the note is not payable on demand and paragraph (2) of this subsection
(a)does not apply, the note is dishonored if it is not paid on the day it becomes
payable.
(b)Dishonor of an unaccepted draft other than a documentary draft is
governed by the following rules:
(1)If a check is duly pre
Free access — add to your briefcase to read the full text and ask questions with AI
(a) Dishonor of a note is governed by the following rules:
(1) If the note is payable on demand, the note is dishonored if presentment is
duly made to the maker and the note is not paid on the day of presentment.
(2) If the note is not payable on demand and is payable at or through a bank
or the terms of the note require presentment, the note is dishonored if presentment
is duly made and the note is not paid on the day it becomes payable or the day of
presentment, whichever is later.
(3) If the note is not payable on demand and paragraph (2) of this subsection
(a) does not apply, the note is dishonored if it is not paid on the day it becomes
payable.
(b) Dishonor of an unaccepted draft other than a documentary draft is
governed by the following rules:
(1) If a check is duly presented for payment to the payor bank otherwise than
for immediate payment over the counter, the check is dishonored if the payor bank
makes timely return of the check or sends timely notice of dishonor or nonpayment
under section 4-4-301 or 4-4-302, or becomes accountable for the amount of the
check under section 4-4-302.
(2) If a draft is payable on demand and paragraph (1) of this subsection (b)
does not apply, the draft is dishonored if presentment for payment is duly made to
the drawee and the draft is not paid on the day of presentment.
(3) If a draft is payable on a date stated in the draft, the draft is dishonored if
(i) presentment for payment is duly made to the drawee and payment is not made
on the day the draft becomes payable or the day of presentment, whichever is later,
or (ii) presentment for acceptance is duly made before the day the draft becomes
payable and the draft is not accepted on the day of presentment.
(4) If a draft is payable on elapse of a period of time after sight or
acceptance, the draft is dishonored if presentment for acceptance is duly made and
the draft is not accepted on the day of presentment.
(c) Dishonor of an unaccepted documentary draft occurs according to the
rules stated in subsection (b)(2), (3), and (4) of this section, except that payment or
acceptance may be delayed without dishonor until no later than the close of the
third business day of the drawee following the day on which payment or
acceptance is required by those paragraphs.
(d) Dishonor of an accepted draft is governed by the following rules:
(1) If the draft is payable on demand, the draft is dishonored if presentment
for payment is duly made to the acceptor and the draft is not paid on the day of
presentment.
(2) If the draft is not payable on demand, the draft is dishonored if
presentment for payment is duly made to the acceptor and payment is not made on
the day it becomes payable or the day of presentment, whichever is later.
(e) In any case in which presentment is otherwise required for dishonor under
this section and presentment is excused under section 4-3-504, dishonor occurs
without presentment if the instrument is not duly accepted or paid.
(f) If a draft is dishonored because timely acceptance of the draft was not
made and the person entitled to demand acceptance consents to a late acceptance,
from the time of acceptance the draft is treated as never having been dishonored.