336.4-301 DEFERRED POSTING; RECOVERY OF PAYMENT BY RETURN OF ITEMS;
TIME OF DISHONOR; RETURN OF ITEMS BY PAYOR BANK.
(a) If a payor bank settles for a demand item other than a documentary draft presented
otherwise than for immediate payment over the counter before midnight of the banking day of
receipt, the payor bank may revoke the settlement and recover the settlement if, before it has made
final payment and before its midnight deadline, it:
(1) returns the item;
(2) returns an image of the item, if the party to which the return is made has entered into
an agreement to accept an image as a return of the item and the image is returned in accordance
with that agreement; or
(3) sends a record providing notice of dishonor or nonpayment if the item is unavailable
(b) If a demand item is received by a payor bank for credit on its books, it may return
the item or send notice of dishonor and may revoke any credit given or recover the amount
thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in
(c) Unless previous notice of dishonor has been sent, an item is dishonored at the time when
for purposes of dishonor it is returned or notice sent in accordance with this section.
(d) An item is returned:
(1) as to an item presented through a clearinghouse, when it is delivered to the presenting
or last collecting bank or to the clearinghouse or is sent or delivered in accordance with
clearinghouse rules; or
(2) in all other cases, when it is sent or delivered to the bank's customer or transferor
or pursuant to instructions.
History: 1965 c 811 s 336.4-301; 1986 c 444; 1992 c 565 s 99; 2003 c 81 art 2 s 5