§ 26-1-4-202 — Responsibility for collection or return; when action timely

Indiana § 26-1-4-202

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 4: 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)
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), 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.
Formerly: Acts 1963, c.317, s.4-202. As amended by
P.L.152-1986, SEC.214; P.L.222-1993, SEC.18.