§ 4-4-202 — Responsibility for collection or return - when action timely

Colorado § 4-4-202

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Bank Deposits and Collections

Text

(a) A
collecting bank must exercise ordinary care in:

(1) Presenting an item or sending it for presentment;

(2) Sending notice of dishonor or nonpayment or returning an item other than
a documentary draft to the bank's transferor after learning that the item has not
been paid or accepted, as the case may be;

(3) Settling for an item when the bank receives final settlement; and

(4) Notifying its transferor of any loss or delay in transit within a reasonable
time after discovery thereof.

(b) A collecting bank exercises ordinary care under subsection (a) of this
section by taking proper action before its midnight deadline following receipt of an
item, notice, or settlement. Taking proper action within a reasonably longer time
may constitute the exercise of ordinary care, but the bank has the burden of
establishing timeliness.

(c) Subject to subsection (a)(1) of this section, a bank is not liable for the
insolvency, neglect, misconduct, mistake, or default of another bank or person or
for loss or destruction of an item in the possession of others or in transit.

Legislative History

Source: L. 94: Entire article amended with relocations, p. 886, � 2, effective January 1, 1995.