(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 a loss or delay in transit within a reasonable time after discovery of the loss or delay.
(b) A collecting bank exercises ordinary care under (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 (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.
Section: Previous 45.04.201 45.04.202 45.04.203 45.04.204 45.04.205 45.04.206 45.04.207 45.04.208 45.04.209 45.04.210 45.04.211 45.04.212 45.04.213 45.04.214 45.04.215 NextLast modified: November 15, 2016