§490:4-202 Responsibility for collection or return; when action timely. (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. [L 1965, c 208, §4-202; HRS §490:4-202; am L 1991, c 118, pt of §4]
Section: Previous 490-4-106 490-4-107 490-4-108 490-4-109 490-4-110 490-4-111 490-4-201 490-4-202 490-4-203 490-4-204 490-4-205 490-4-206 490-4-207 490-4-208 490-4-209 NextLast modified: October 27, 2016