GA Code § 11-3-502 (2021)
2021 Georgia Code|Title 11 - Commercial Code|Article 3 - Negotiable Instruments|Part 5 - Dishonor|§ 11-3-502. Dishonor

  Dishonor of a note is governed by the following rules:   If the note is payable on demand, the note is dishonored if presentment is duly made to the maker and the note is not paid on the day of presentment.   If the note is not payable on demand and is payable at or through a bank or the terms of the note require presentment, the note is dishonored if presentment is duly made and the note is not paid on the day it becomes payable or the day of presentment, whichever is later.   If the note is not payable on demand and paragraph (2) of this subsection does not apply, the note is dishonored if it is not paid on the day it becomes payable.     Dishonor of an unaccepted draft other than a documentary draft is governed by the following rules:   If a check is duly presented for payment to the payor bank otherwise than for immediate payment over the counter, the check is dishonored if the payor bank makes timely return of the check or sends timely notice of dishonor or nonpayment under Code Section 11-4-301 or 11-4-302, or becomes accountable for the amount of the check under Code Section 11-4-302.   If a draft is payable on demand and paragraph (1) of this subsection does not apply, the draft is dishonored if presentment for payment is duly made to the drawee and the draft is not paid on the day of presentment.   If a draft is payable on a date stated in the draft, the draft is dishonored if:   If a draft is payable on elapse of a period of time after sight or acceptance, the draft is dishonored if presentment for acceptance is duly made and the draft is not accepted on the day of presentment.     Dishonor of an unaccepted documentary draft occurs according to the rules stated in paragraphs (2), (3), and (4) of subsection (b) of this Code section, except that payment or acceptance may be delayed without dishonor until no later than the close of the third business day of the drawee following the day on which payment or acceptance is required by those paragraphs.   Dishonor of an accepted draft is governed by the following rules:   If the draft is payable on demand, the draft is dishonored if presentment for payment is duly made to the acceptor and the draft is not paid on the day of presentment; or   If the draft is not payable on demand, the draft is dishonored if presentment for payment is duly made to the acceptor and payment is not made on the day it becomes payable or the day of presentment, whichever is later.     In any case in which presentment is otherwise required for dishonor under this Code section and presentment is excused under Code Section 11-3-504, dishonor occurs without presentment if the instrument is not duly accepted or paid.   If a draft is dishonored because timely acceptance of the draft was not made and the person entitled to demand acceptance consents to a late acceptance, from the time of acceptance the draft is treated as never having been dishonored.    Presentment for payment is duly made to the drawee and payment is not made on the day the draft becomes payable or the day of presentment, whichever is later; or   Presentment for acceptance is duly made before the day the draft becomes payable and the draft is not accepted on the day of presentment.    (Code 1981, §11-3-502, enacted by Ga. L. 1996, p. 1306, § 3.)   Cross references.   - Restriction on setoff by holder or transferee of negotiable instrument received under dishonor, § 13-7-7.   JUDICIAL DECISIONS   Editor's notes.   - In light of the similarity of the provisions, decisions under former Code Section 11-3-507 are included in the annotations for this section.   Recourse only against maker or endorser.   - Payee has no cause of action against payor bank for wrongful dishonor; payee's only recourse is against maker or endorser. Southeastern Pipeline Serv., Inc. v. Citizens & S. Bank, 617 F.2d 67 (5th Cir. 1980) (decided under former Code Section 11-3-507).    Upon presentment of check as to which payment was refused, check was dishonored, and plaintiff's remedy, as a holder, was "against the drawers and endorsers," not defendant bank and its agent, neither of whom owed plaintiff a duty. Stewart v. Citizens & S. Nat'l Bank, 138 Ga. App. 209, 225 S.E.2d 761 (1976) (decided under former Code Section11-3-507).   RESEARCH REFERENCES   Am. Jur. 2d.   - 11 Am. Jur. 2d, Bills and Notes, § 351 et seq. 67 Am. Jur. 2d, Sales, § 273.   Wrongful Dishonor of Check, 23 POF2d 407.   C.J.S.   - 10 C.J.S., Bills and Notes, §§ 160, 203, 204.   U.L.A.   - Uniform Commercial Code (U.L.A.) § 3-502.   ALR.    - Necessity of endorsement by all payees before maturity to make a transferee a bona fide holder, 25 A.L.R. 163.    Seller's rights in respect of the property, or its proceeds, upon dishonor of draft or check for purchase price, on a cash sale, 54 A.L.R. 526.    Presentment and notice of dishonor as condition of holding one who appears on paper as endorser but was in fact primarily liable, 62 A.L.R. 116.    Refusal of drawee bank to certify check as equivalent to dishonor for purposes of drawer's liability, 62 A.L.R. 377.    Liability of drawer of check as affected by failure to give or delay in giving him notice of its dishonor, 86 A.L.R. 463.    Liability of bank to depositor for dishonoring check, 126 A.L.R. 206.