Texas Business & Commerce Code

§ 4.202 — RESPONSIBILITY FOR COLLECTION OR RETURN; WHEN ACTION TIMELY

BC § 4.202Title 1. UNIFORM COMMERCIAL CODE · Ch. 4. BANK DEPOSITS AND COLLECTIONS · Art. B. COLLECTION OF ITEMS: DEPOSITARY AND COLLECTING BANKS

Statute text

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(a)A collecting bank must exercise ordinary care in:

(1)presenting an item or sending it for presentment;

(2)sending notice of dishonor or non-payment 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.

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Legislative history

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967. Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.