8.4-202 - Responsibility for collection or return; when action timely. - Virginia Statutes

§ 8.4-202. Responsibility for collection or return; when action timely.

(a) A collecting bank must exercise ordinary care in:

(1) presenting an item or sending it for presentment;

(2) sending notice of dishonor or nonpayment or returning an item other thana documentary draft to the bank's transferor after learning that the item hasnot been paid or accepted, as the case may be;

(3) settling for an item when the bank receives final settlement; and

(4) notifying its transferor of any loss or delay in transit within areasonable time after discovery thereof.

(b) A collecting bank exercises ordinary care under subsection (a) by takingproper action before its midnight deadline following receipt of an item,notice, or settlement. Taking proper action within a reasonably longer timemay constitute the exercise of ordinary care, but the bank has the burden ofestablishing timeliness.

(c) Subject to subsection (a) (1), 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.

(Code 1950, § 6-63; 1964, c. 219; 1992, c. 693.)