California Commercial Code

§ 4214

COM § 4214 Effective Jan 1, 1993Div. 4 · Ch. 2

Statute text

(a)If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge back the amount of any credit given for the item to its customer’s account, or obtain refund from its customer, whether or not it is able to return the item, if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank’s midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit, or obtain refund from its customer, but it is liable for any loss resulting from the delay. These rights to revoke, charge back and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final.

(b)A collecting bank returns an item when it is sent or delivered to the bank’s customer or transferor or pursuant to its instructions.

(c)A depositary bank that is also the payor may charge back the amount of an item to its customer’s account or obtain refund in accordance with the section governing return of an item received by a payor bank for credit on its books (Section 4301).

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Legislative history

Added by renumbering Section 4212 by Stats. 1992, Ch. 914, Sec. 34. Effective January 1, 1993.