California Commercial Code Section 4301
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California Laws > Commercial Code > California Commercial Code Section 4301
4301. (a) If a payor bank settles for a demand item other than a
documentary draft presented otherwise than for immediate payment over
the counter before midnight of the banking day of receipt, the payor
bank may revoke the settlement and recover the settlement if, before
it has made final payment and before its midnight deadline, it
(1) Returns the item.
(2) Sends written notice of dishonor or nonpayment if the item is
unavailable for return.
(b) If a demand item is received by a payor bank for credit on its
books, it may return the item or send notice of dishonor and may
revoke any credit given or recover the amount thereof withdrawn by
its customer, if it acts within the time limit and in the manner
specified in subdivision (a).
(c) Unless previous notice of dishonor has been sent an item is
dishonored at the time when for purposes of dishonor it is returned
or notice sent in accordance with this section.
(d) An item is returned either:
(1) As to an item presented through a clearing house, when it is
delivered to the presenting or last collecting bank or to the
clearing house or is sent or delivered in accordance with clearing
(2) In all other cases, when it is sent or delivered to the bank's
customer or transferor or pursuant to his instructions.
Last modified: February 22, 2013