(1) A collecting bank must exercise ordinary care in:
(a) Presenting an item or sending it for presentment;
(b) 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;
(c) Settling for an item when the bank receives final settlement; and
(d) Notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.
(2) A collecting bank exercises ordinary care under subsection (1) 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.
(3) Subject to subsection (1)(a) 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. [1961 c.726 §74.2020; 1993 c.545 §85]Section: Previous 74.1060 74.1070 74.1080 74.1090 74.1110 74.1120 74.2010 74.2020 74.2030 74.2040 74.2050 74.2060 74.2070 74.2080 74.2090 Next
Last modified: August 7, 2008