Texas Business & Commerce Code
§ 4.214 — RIGHT OF CHARGE-BACK OR REFUND; LIABILITY OF COLLECTING BANK; RETURN OF ITEM
BC § 4.214Title 1. UNIFORM COMMERCIAL CODE · Ch. 4. BANK DEPOSITS AND COLLECTIONS · Art. B. COLLECTION OF ITEMS: DEPOSITARY AND COLLECTING BANKS
Statute text
View on source(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 that 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 customers, 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 4.301).
(d)The right to charge-back is not affected by:
(1)previous use of a credit given for the item; or
(2)failure by any bank to exercise ordinary care with respect to the item, but a bank so failing remains liable.
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Legislative history
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967. Renumbered from Sec. 4.212 and amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.