Indiana § 26-1-4-214 Right of charge-back or refund; liability of collecting bank; return of
item

Indiana Statutes

§ 26-1-4-214 — Right of charge-back or refund; liability of collecting bank; return of item

Indiana·Title 26 COMMERCIAL LAW·Art. 1 UNIFORM COMMERCIAL CODE·Ch. 4 Bank Deposits and Collections

(a)If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge back the amount of any credit given for the item to its customer's account, or obtain refund from its customer, whether or not it is able to return the item, if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank's midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit, or obtain refund from its c

Free access — add to your briefcase to read the full text and ask questions with AI

(a) If a collecting bank has made
provisional settlement with its customer for an item and fails by reason
of dishonor, suspension of payments by a bank, or otherwise to receive
settlement for the item which is or becomes final, the bank may revoke
the settlement given by it, charge back the amount of any credit given
for the item to its customer's account, or obtain refund from its
customer, whether or not it is able to return the item, if by its midnight
deadline or within a longer reasonable time after it learns the facts it
returns the item or sends notification of the facts. If the return or notice
is delayed beyond the bank's midnight deadline or a longer reasonable
time after it learns the facts, the bank may revoke the settlement,
charge back the credit, or obtain refund from its customer, but it is
liable for any loss resulting from the delay. These rights to revoke,
charge back, and obtain refund terminate if and when a settlement for
the item received by the bank is or becomes final.
(b) A collecting bank returns an item when it is sent or delivered to
the bank's customer or transferor or under its instructions.
(c) A depositary bank that is also the payor may charge back the
amount of an item to its customer's account or obtain refund in
accordance with the section governing return of an item received by a
payor bank for credit on its books (IC 26-1-4-301).
(d) The right to charge back is not affected by:
(1) previous use of a credit given for the item; or
(2) failure by any bank to exercise ordinary care with respect to
the item, but a bank so failing remains liable.
(e) A failure to charge back or claim refund does not affect other
rights of the bank against the customer or any other party.
(f) If credit is given in dollars as the equivalent of the value of an
item payable in foreign money, the dollar amount of any charge-back
or refund must be calculated on the basis of the bank-offered spot rate
for the foreign money prevailing on the day when the person entitled
to the charge-back or refund learns that it will not receive payment in
ordinary course.
Formerly: Acts 1963, c.317, s.4-214. As amended by
P.L.152-1986, SEC.221; P.L.222-1993, SEC.30.

Indiana § 26-1-4-214 (Right of charge-back or refund; liability of collecting bank; return of item) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.