§12A-3-502. Dishonor.
614 words·~3 min read·
/ok/title-12a-uniform-commercial-code/12a-3-502·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
DISHONOR
(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; and
(3)If the note is not payable on demand and paragraph
of this subsection 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 of this title, or becomes accountable for the
amount of the check under Section 4-302 of this title;
(2)If a draft is payable on demand and paragraph
(1)of
this subsection does not apply, the draft is
dishonored if presentment for payment is duly made to
the drawee and the draft is not paid on the day of
presentment;
(3)If a draft is payable on a date stated in the draft,
the draft is dishonored if
(i)presentment for payment
is duly made to the drawee and payment is not made on
the day the draft becomes payable or the day of
presentment, whichever is later, or
(ii)presentment
for acceptance is duly made before the day the draft
becomes payable and the draft is not accepted on the
day of presentment; and
(4)If a draft is payable on elapse of a period of time
after sight or acceptance, the draft is dishonored if
presentment for acceptance is duly made and the draft
is not accepted on the day of presentment.
(c)Dishonor of an unaccepted documentary draft occurs according to the rules stated in paragraphs (2),
(3)and
(4)of subsection
(b)of this section, except that payment or acceptance may be delayed without dishonor until no later than the close of the third business day of the drawee following the day on which payment or acceptance is required by those paragraphs.
(d)Dishonor of an accepted draft is governed by the following rules:
(1)If the draft is payable on demand, the draft is
dishonored if presentment for payment is duly made to
the acceptor and the draft is not paid on the day of
presentment; and
(2)If the draft is not payable on demand, the draft is
dishonored if presentment for payment is duly made to
the acceptor and payment is not made on the day it
becomes payable or the day of presentment, whichever
is later.
(e)In any case in which presentment is otherwise required for dishonor under this section and presentment is excused under Section 3-504 of this title, dishonor occurs without presentment if the instrument is not duly accepted or paid.
(f)If a draft is dishonored because timely acceptance of the draft was not made and the person entitled to demand acceptance consents to a late acceptance, from the time of acceptance the draft is treated as never having been dishonored. Laws 1961, p. 115, § 3-502; Laws 1991, c. 117, § 85, eff. Jan. 1, 1992.