Texas Business & Commerce Code

§ 3.502 — DISHONOR

BC § 3.502Title 1. UNIFORM COMMERCIAL CODE · Ch. 3. NEGOTIABLE INSTRUMENTS · Art. E. DISHONOR

Statute text

(a)Dishonor of a note is governed by the following rules:

(1)If the note is payable on demand, the note is dishonored if presentment is duly made to the maker and the note is not paid on the day of presentment.

(2)If the note is not payable on demand and is payable at or through a bank or the terms of the note require presentment, the note is dishonored if presentment is duly made and the note is not paid on the day it becomes payable or the day of presentment, whichever is later.

(3)If the note is not payable on demand and Subdivision (2) does not apply, the note is dishonored if it is not paid on the day it becomes payable.

(b)Dishonor of an unaccepted draft other than a documentary draft is governed by the following rules:

(1)If a check is duly presented for payment to the payor bank otherwise than for immediate payment over the counter, the check is dishonored if the payor bank makes timely return of the check or sends timely notice of dishonor or nonpayment under Section 4.301 or 4.302, or becomes accountable for the amount of the check under Section 4.302.

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Legislative history

Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.