§ 25-4-202. Responsibility for collection or return; when action timely. - North Carolina Statutes

§25‑4‑202.  Responsibility for collection or return; when actiontimely.

(a)        A collecting bankmust exercise ordinary care in:

(1)        Presenting an itemor sending it for presentment;

(2)        Sending notice ofdishonor or nonpayment or returning an item other than a documentary draft tothe bank's transferor after learning that the item has not been paid oraccepted, as the case may be;

(3)        Settling for an itemwhen the bank receives final settlement; and

(4)        Notifying itstransferor of any loss of delay in transit within a reasonable time afterdiscovery thereof.

(b)        A collecting bankexercises ordinary care under subsection (a) of this section by taking properaction before its midnight deadline following receipt of an item, notice, orsettlement. Taking proper action within a longer reasonable time may constitutethe exercise of ordinary care, but the bank has the burden of establishingtimeliness.

(c)        Subject tosubsection (a)(1) of this section, a bank is not liable for the insolvency,neglect, misconduct, mistake, or default of another bank or person or for lossor destruction of an item in the possession of others or in transit. (1965,c. 700, s. 1; 1995, c. 232, s. 2.)