§ 25-4-302. Payor bank's responsibility for late return of item. - North Carolina Statutes

§25‑4‑302.  Payor bank's responsibility for late return of item.

(a)        If an item ispresented to and received by a payor bank, the bank is accountable for theamount of:

(1)        A demand item, otherthan a documentary draft, whether properly payable or not, if the bank, in anycase in which it is not also the depositary bank, retains the item beyondmidnight of the banking day of receipt without settling for it or, whether ornot it is also the depositary bank, does not pay or return the item or sendnotice of dishonor until after its midnight deadline; or

(2)        Any other properlypayable item unless within the time allowed for acceptance or payment of thatitem, the bank either accepts or pays the item or returns it and accompanyingdocuments.

(b)        The liability of apayor bank to pay an item pursuant to subsection (a) of this section is subjectto defenses based on breach of a presentment warranty (G.S. 25‑4‑208)[25‑4‑207.1] or proof that the person seeking enforcement of theliability presented or transferred the item for the purpose of defrauding thepayor bank. (1899, c. 733, s. 137; Rev., s. 2287; C.S., s. 3119;1949, c. 954; 1965, c. 700, s. 1; 1995, c. 232, s. 2.)