400.4-302. Payor bank's responsibility for late return of item. - Missouri Statutes

Payor bank's responsibility for late return of item.

400.4-302. (a) If an item is presented to and received by a payor bank,the bank is accountable for the amount of:

(1) a demand item, other than a documentary draft, whether properlypayable or not, if the bank, in any case in which it is not also thedepositary bank, retains the item beyond midnight of the banking day ofreceipt without settling for it or, whether or not it is also the depositarybank, does not pay or return the item or send notice of dishonor until afterits midnight deadline; or

(2) any other properly payable item unless, within the time allowed foracceptance or payment of that item, the bank either accepts or pays the itemor returns it and accompanying documents.

(b) The liability of a payor bank to pay an item pursuant to subsection(a) is subject to defenses based on breach of a presentment warranty (Section400.4-208) or proof that the person seeking enforcement of the liabilitypresented or transferred the item for the purpose of defrauding the payorbank.

(L. 1963 p. 503 § 4-302, A.L. 1992 S.B. 448)