§ 4303. When items subject to notice, stop-payment order, legal process or set-off; order in which items may be charged or certi.
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§ 4303. When items subject to notice, stop-payment order, legal process or set-off; order in which items may be charged or certified.
(a)When items subject to knowledge, notice, stop-payment order, legal process or set-off.-- Any knowledge, notice or stop-payment order received by, legal process served upon or set-off exercised by a payor bank comes too late to terminate, suspend or modify the right or duty of the bank to pay an item or to charge the account of its customer for the item if the knowledge, notice, stop-payment order or legal process is received or served and a reasonable time for the bank to act thereon expires or the set-off is exercised after the earliest of the following:
(1)The bank accepts or certifies the item.
(2)The bank pays the item in cash.
(3)The bank settles for the item without having a right to revoke the settlement under statute, clearinghouse rule or agreement.
(4)The bank becomes accountable for the amount of the item under section 4302 (relating to responsibility of payor bank for late return of item).
(5)With respect to checks, a cutoff hour no earlier than one hour after the opening of the next banking day after the banking day on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of the next banking day after the banking day on which the bank received the check.
(b)Order in which items may be accepted, paid, certified or charged.-- Subject to subsection (a), items may be accepted, paid, certified or charged to the indicated account of its customer in any order.
13c4303v
(July 9, 1992, P.L.507, No.97, eff. one year)
Cross References. Section 4303 is referred to in sections 4401, 4403 of this title.