§ 26-1-4-503 — Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case needed

Indiana § 26-1-4-503

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

Text

Unless otherwise instructed and except as
provided in IC 26-1-5.1, a bank presenting a documentary draft:
(1) must deliver the documents to the drawee on acceptance of the
draft if it is payable more than three (3) days after presentment;
otherwise, only on payment; and
(2) upon dishonor, either in the case of presentment for
acceptance or presentment for payment, may seek and follow
instructions from any referee in case of need designated in the
draft, or if the presenting bank does not choose to utilize the
referee's services, it must use diligence and good faith to ascertain
the reason for dishonor, must notify its transferor of the dishonor
and of the results of its effort to ascertain the reasons therefor, and
must request instructions.
However the presenting bank is under no obligation with respect to
goods represented by the documents except to follow any reasonable
instructions seasonably received. It has a right to reimbursement for
any expense incurred in following instructions and to prepayment of or
indemnity for those expenses.
Formerly: Acts 1963, c.317, s.4-503. As amended by
P.L.152-1986, SEC.226; P.L.222-1993, SEC.44; P.L.183-1996,
SEC.3.