reglab/statecodes huggingface dataset:
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-1 - Part 1 General Provisions and Definitions (440.4101...440.4111) › Section 440.4102 - Conflict of Laws; Provisions Applicable.

440.4102 Conflict of laws; provisions applicable.
Sec. 4102.
(1) To the extent that items within this article are also within articles 3 and 8, they are subject to those articles. If there is conflict, this article governs article 3 but article 8 governs this article.
(2) The liability of a bank for action or non-action with respect to an item handled by it for purposes of presentment, payment, or collection is governed by the law of the place where the bank is located. In the case of action or non-action by or at a branch or separate office of a bank, its liability is governed by the law of the place where the branch or separate office is located.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-1 - Part 1 General Provisions and Definitions (440.4101...440.4111) › Section 440.4103 - Variation by Agreement; Measure of Damages; Action Constituting Ordinary Care.

440.4103 Variation by agreement; measure of damages; action constituting ordinary care.
Sec. 4103.
(1) The effect of the provisions of this article may be varied by agreement but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, the parties may determine by agreement the standards by which the bank's responsibility is to be measured if those standards are not manifestly unreasonable.
(2) Federal Reserve regulations and operating circulars, clearing-house rules, and the like have the effect of agreements under subsection (1), whether or not specifically assented to by all parties interested in items handled.
(3) Action or non-action approved by this article or pursuant to Federal Reserve regulations or operating circulars is the exercise of ordinary care and, in the absence of special instructions, action or non-action consistent with clearing-house rules and the like or with a general banking usage not disapproved by this article, is prima facie the exercise of ordinary care.
(4) The specification or approval of certain procedures by this article is not disapproval of other procedures which may be reasonable under the circumstances.
(5) The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount that could not have been realized by the exercise of ordinary care. If there is also bad faith, it includes any other damages the party suffered as a proximate consequence.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-1 - Part 1 General Provisions and Definitions (440.4101...440.4111) › Section 440.4105 - Additional Definitions.

440.4105 Additional definitions.
Sec. 4105.
As used in this article unless the context otherwise requires:
(a) "Bank" means a person engaged in the business of banking, including a saving bank, saving and loan association, credit union, or trust company.
(b) "Depositary bank" means the first bank to take an item even though it is also the payor bank, unless the item is presented for immediate payment over the counter.
(c) "Payor bank" means a bank that is the drawee of a draft.
(d) "Intermediary bank" means a bank to which an item is transferred in course of collection except the depositary or payor bank.
(e) "Collecting bank" means a bank handling the item for collection except the payor bank.
(f) "Presenting bank" means a bank presenting an item except a payor bank.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-1 - Part 1 General Provisions and Definitions (440.4101...440.4111) › Section 440.4106 - “Payable Through” and “Payable At” Explained; Bank as Collecting Bank.

440.4106 “Payable through” and “payable at” explained; bank as collecting bank.
Sec. 4106.
(1) If an item states that it is "payable through" a bank identified in the item, (i) the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item, and (ii) the item may be presented for payment only by or through the bank.
(2) If an item states that it is "payable at" a bank identified in the item, (i) the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item, and (ii) the item may be presented for payment only by or through the bank.
(3) If a draft names a nonbank drawee and it is unclear whether a bank named in the draft is a co-drawee or a collecting bank, the bank is a collecting bank.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1964, Act 250, Eff. Aug. 28, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-1 - Part 1 General Provisions and Definitions (440.4101...440.4111) › Section 440.4107 - Bank Branch or Separate Office as Separate Bank.

440.4107 Bank branch or separate office as separate bank.
Sec. 4107.
A branch or separate office of a bank is a separate bank for the purpose of computing the time within which and determining the place at or to which action may be taken or notices or orders shall be given under this article and under article 3.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-1 - Part 1 General Provisions and Definitions (440.4101...440.4111) › Section 440.4108 - Time of Receipt of Items.

440.4108 Time of receipt of items.
Sec. 4108.
(1) For the purpose of allowing time to process items, prove balances and make the necessary entries on its books to determine its position for the day, a bank may fix an afternoon hour of 2 P.M. or later as a cut-off hour for the handling of money and items and the making of entries on its books.
(2) An item or deposit of money received on any day after a cut-off hour so fixed or after the close of the banking day may be treated as being received at the opening of the next banking day.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-1 - Part 1 General Provisions and Definitions (440.4101...440.4111) › Section 440.4109 - Collecting Bank; Waiving, Modifying, or Extending Time Limits; Excuse for Delay.

440.4109 Collecting bank; waiving, modifying, or extending time limits; excuse for delay.
Sec. 4109.
(1) Unless otherwise instructed, a collecting bank in a good faith effort to secure payment of a specific item drawn on a payor other than a bank and with or without the approval of any person involved, may waive, modify, or extend time limits imposed or permitted by this act for a period not exceeding 2 additional banking days without discharge of drawers or endorsers or liability to its transferor or any prior party.
(2) Delay by a collecting bank or payor bank beyond time limits prescribed or permitted by this act or by instructions is excused if (i) the delay is caused by interruption of communication or computer facilities, suspension of payments by another bank, war, emergency conditions, failure of equipment, or other circumstances beyond the control of the bank and (ii) the bank exercises such diligence as the circumstances require.
History:
Add. 1964, Act 250, Eff. Aug. 28, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-1 - Part 1 General Provisions and Definitions (440.4101...440.4111) › Section 440.4110 - “Agreement for Electronic Presentment” Defined; Presentment Notice.

440.4110 “Agreement for electronic presentment” defined; presentment notice.
Sec. 4110.
(1) "Agreement for electronic presentment" means an agreement, clearing-house rule, or Federal Reserve regulation or operating circular, providing that presentment of an item may be made by transmission of an image of an item or information describing the item ("presentment notice") rather than delivery of the item itself. The agreement may provide for procedures governing retention, presentment, payment, dishonor, and other matters concerning items subject to the agreement.
(2) Presentment of an item pursuant to an agreement for presentment is made when the presentment notice is received.
(3) If presentment is made by presentment notice, a reference to "item" or "check" in this article means the presentment notice unless the context otherwise indicates.
History:
Add. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-1 - Part 1 General Provisions and Definitions (440.4101...440.4111) › Section 440.4111 - Commencement of Action Under Article; Time Period.

440.4111 Commencement of action under article; time period.
Sec. 4111.
An action to enforce an obligation, duty, or right arising under this article must be commenced within 3 years after the cause of action accrues.
History:
Add. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4201 - Agency Status of Banks; Provisional Status of Credits; Applicability of Article; Endorsement With Pay Any Bank.

440.4201 Agency status of banks; provisional status of credits; applicability of article; endorsement with pay any bank.
Sec. 4201.
(1) Unless a contrary intent clearly appears and before the time that a settlement given by a collecting bank for an item is or becomes final, the bank, with respect to the item, is an agent or sub-agent of the owner of the item and any settlement given for the item is provisional. This provision applies regardless of the form of indorsement or lack of indorsement and even though credit given for the item is subject to immediate withdrawal as of right or is in fact withdrawn; but the continuance of ownership of an item by its owner and any rights of the owner to proceeds of the item are subject to rights of a collecting bank, such as those resulting from outstanding advances on the item and rights of setoff. If an item is handled by banks for purposes of presentment, payment, collection, or return, the relevant provisions of this article apply even though action of parties clearly establishes that a particular bank has purchased the item and is the owner of it.
(2) After an item has been indorsed with the words "pay any bank" or the like, only a bank may acquire the rights of a holder until the item has been either of the following:
(a) Returned to the customer initiating collection.
(b) Specially endorsed by a bank to a person who is not a bank.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4202 - Collecting Bank; Duties; Exercising Ordinary Care; Liability.

440.4202 Collecting bank; duties; exercising ordinary care; liability.
Sec. 4202.
(1) A collecting bank must exercise ordinary care in all of the following:
(a) Presenting an item or sending it for presentment.
(b) Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank's transferor after learning that the item has not been paid or accepted, as the case may be.
(c) Settling for an item when the bank receives final settlement.
(d) Notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.
(2) A collecting bank exercises ordinary care under subsection (1) by taking proper action before its midnight deadline following receipt of an item, notice, or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.
(3) Subject to subsection (1)(a), a bank is not liable for the insolvency, neglect, misconduct, mistake, or default of another bank or person or for loss or destruction of an item in the possession of others or in transit.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4203 - Collecting Bank; Instructions From Transferor.

440.4203 Collecting bank; instructions from transferor.
Sec. 4203.
Subject to article 3 concerning conversion of instruments (section 3420) and restrictive endorsements (section 3206) only a collecting bank's transferor can give instructions that affect the bank or constitute notice to it, and a collecting bank is not liable to prior parties for any action taken pursuant to the instructions or in accordance with any agreement with its transferor.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4204 - Collecting Bank; Methods of Sending Items; Presentment.

440.4204 Collecting bank; methods of sending items; presentment.
Sec. 4204.
(1) A collecting bank shall send items by a reasonably prompt method, taking into consideration relevant instructions, the nature of the item, the number of those items on hand, the cost of collection involved, and the method generally used by it or others to present those items.
(2) A collecting bank may send:
(a) An item directly to the payor bank.
(b) An item to a nonbank payor if authorized by its transferor.
(c) An item other than documentary drafts to a nonbank payor, if authorized by federal reserve regulation or operating circular, clearing-house rule, or the like.
(3) Presentment may be made by a presenting bank at a place where the payor bank or other payor has requested that presentment be made.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1964, Act 250, Eff. Aug. 28, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4205 - Depositary Bank; Item Delivered by Customer for Collection.

440.4205 Depositary bank; item delivered by customer for collection.
Sec. 4205.
If a customer delivers an item to a depositary bank for collection, then both of the following apply:
(a) The depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer endorses the item, and, if the bank satisfies the other requirements of section 3302, it is a holder in due course.
(b) The depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the item was paid to the customer or deposited to the customer's account.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4206 - Transfer Between Banks.

440.4206 Transfer between banks.
Sec. 4206.
Any agreed method which identifies the transferor bank is sufficient for the item's further transfer to another bank.
History:
1962, Act 174, Eff. Jan. 1, 1964
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4207 - Warranties of Customer and Collecting Bank on Transfer of Items; Accrual of Cause of Action.

440.4207 Warranties of customer and collecting bank on transfer of items; accrual of cause of action.
Sec. 4207.
(1) A customer or collecting bank that transfers an item and receives a settlement or other consideration warrants to the transferee and to any subsequent collecting bank all of the following:
(a) That the warrantor is a person entitled to enforce the item.
(b) That all signatures on the item are authentic and authorized.
(c) That the item has not been altered.
(d) That the item is not subject to a defense or claim in recoupment under section 3305(1) of any party that can be asserted against the warrantor.
(e) That the warrantor has no knowledge of any insolvency proceeding commenced with respect to the maker or acceptor or, in the case of an unaccepted draft, the drawer.
(f) With respect to any remotely created consumer item, that the person on whose account the item is drawn authorized the issuance of the item in the amount for which the item is drawn.
(2) If an item is dishonored, a customer or collecting bank transferring the item and receiving settlement or other consideration is obliged to pay the amount due on the item (i) according to the terms of the item at the time it was transferred, or (ii) if the transfer was of an incomplete item, according to its terms when completed as stated in sections 3115 and 3407. The obligation of a transferor is owed to the transferee and to any subsequent collecting bank that takes the item in good faith. A transferor cannot disclaim its obligation under this subsection by an endorsement stating that it is made "without recourse" or otherwise disclaiming liability.
(3) A person to whom the warranties under subsection (1) are made and who took the item in good faith may recover from the warrantor as damages for breach of warranty an amount equal to the loss suffered as a result of the breach, but not more than the amount of the item plus expenses and loss of interest incurred as a result of the breach.
(4) The warranties stated in subsection (1) cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within 30 days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim.
(5) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993 ;-- Am. 2014, Act 103, Imd. Eff. Apr. 10, 2014
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4209 - Electronic Presentment; Encoding of Information and Retaining Items; Warranties; Recovery of Damages, Expenses, and Loss of Interest.

440.4209 Electronic presentment; encoding of information and retaining items; warranties; recovery of damages, expenses, and loss of interest.
Sec. 4209.
(1) A person who encodes information on or with respect to an item after issue warrants to any subsequent collecting bank and to the payor bank or other payor that the information is correctly encoded. If the customer of a depositary bank encodes, that bank also makes the warranty.
(2) A person who undertakes to retain an item pursuant to an agreement for electronic presentment warrants to any subsequent collecting bank and to the payor bank or other payor that retention and presentment of the item comply with the agreement. If a customer of a depositary bank undertakes to retain an item, that bank also makes this warranty.
(3) A person to whom warranties are made under this section and who took the item in good faith may recover from the warrantor as damages for breach of warranty an amount equal to the loss suffered as a result of the breach, plus expenses and loss of interest incurred as a result of the breach.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4210 - Security Interest of Collecting Bank in Items, Accompanying Documents, or Proceeds.

440.4210 Security interest of collecting bank in items, accompanying documents, or proceeds.
Sec. 4210.
(1) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of any of the following:
(a) If an item is deposited in an account, to the extent to which credit given for the item has been withdrawn or applied.
(b) If an item for which it has given credit is available for withdrawal as of right, to the extent of the credit given whether or not the credit is drawn upon and whether or not there is a right of charge-back.
(c) If it makes an advance on or against the item.
(2) If credit given for several items received at one time or pursuant to a single agreement is withdrawn or applied in part the security interest remains upon all the items, any accompanying documents or the proceeds of either. For the purpose of this section, credits first given are first withdrawn.
(3) Receipt by a collecting bank of a final settlement for an item is a realization on its security interest in the item, accompanying documents and proceeds. So long as the bank does not receive final settlement for the item or give up possession of the item or possession or control of the accompanying documents for purposes other than collection, the security interest continues to that extent and is subject to article 9 except for the following:
(a) A security agreement is not necessary to make the security interest enforceable under section 9203(2)(c)(i).
(b) A filing is not required to perfect the security interest.
(c) The security interest has priority over conflicting perfected security interests in the item, accompanying documents, or proceeds.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993 ;-- Am. 2000, Act 348, Eff. July 1, 2001 ;-- Am. 2012, Act 87, Eff. July 1, 2013
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4211 - Bank With Security Interest as Holder in Due Course.

440.4211 Bank with security interest as holder in due course.
Sec. 4211.
For purposes of determining its status as a holder in due course, a bank has given value to the extent it has a security interest in an item, if the bank otherwise complies with the requirements of section 3302 on what constitutes a holder in due course.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4212 - Presentment by Notice of Item Not Payable By, Through, or at a Bank; Treating Item as Dishonored.

440.4212 Presentment by notice of item not payable by, through, or at a bank; treating item as dishonored.
Sec. 4212.
(1) Unless otherwise instructed, a collecting bank may present an item not payable by, through or at a bank by sending to the party to accept or pay a record providing notice that the bank holds the item for acceptance or payment. The notice must be sent in time to be received on or before the day when presentment is due and the bank must meet any requirement of the party to accept or pay under section 3501 by the close of the bank's next banking day after it knows of the requirement.
(2) If presentment is made by notice and payment, acceptance, or request for compliance with a requirement under section 3501 is not received by the close of business on the day after maturity or in the case of demand items by the close of business on the third banking day after notice was sent, the presenting bank may treat the item as dishonored and charge any drawer or endorser by sending it notice of the facts.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993 ;-- Am. 2014, Act 103, Imd. Eff. Apr. 10, 2014
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4213 - Settlement; Medium and Time.

440.4213 Settlement; medium and time.
Sec. 4213.
(1) With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearing-house rules, and the like, or agreement. In the absence of such prescription, the following apply:
(a) The medium of settlement is cash or credit to an account in a Federal Reserve bank of or specified by the person to receive settlement.
(b) The time of settlement is as follows:
(i) With respect to tender of settlement by cash, a cashier's check, or teller's check, when the cash or check is sent or delivered.
(ii) With respect to tender of settlement by credit in an account in a federal reserve bank, when the credit is made.
(iii) With respect to tender of settlement by a credit or debit to an account in a bank, when the credit or debit is made or, in the case of tender of settlement by authority to charge an account, when the authority is sent or delivered.
(iv) With respect to tender of settlement by a funds transfer, when payment is made pursuant to section 4406a(1) to the person receiving settlement.
(2) If the tender of settlement is not by a medium authorized by subsection (1) or the time of settlement is not fixed by subsection (1), no settlement occurs until the tender of settlement is accepted by the person receiving settlement.
(3) If settlement for an item is made by cashier's check or teller's check and the person receiving settlement, before its midnight deadline then 1 of the following apply:
(a) Presents or forwards the check for collection, settlement is final when the check is finally paid.
(b) Fails to present or forward the check for collection, settlement is final at the midnight deadline of the person receiving settlement.
(4) If settlement for an item is made by giving authority to charge the account of the bank giving settlement in the bank receiving settlement, settlement is final when the charge is made by the bank receiving settlement if there are funds available in the account for the amount of the item.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4214 - Right to Charge-Back or Refund.

440.4214 Right to charge-back or refund.
Sec. 4214.
(1) If a collecting bank has made provisional settlement with its customer for an item and itself fails by reason of dishonor, suspension of payments by a bank or otherwise to receive a settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge back the amount of any credit given for the item to its customer's account or obtain refund from its customer whether or not it is able to return the items if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank's midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit, or obtain return from its customer, but it is liable for any loss resulting from the delay. These rights to revoke, charge-back and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final.
(2) A collecting bank returns an item when it is sent or delivered to the bank's customer or transferor or pursuant to its instructions.
(3) A depositary bank that is also the payor may charge-back the amount of an item to its customer's account or obtain refund in accordance with the section governing return of an item received by a payor bank for credit on its books (section 4301).
(4) The right to charge-back is not affected by either of the following:
(a) Previous use of a credit given for the item.
(b) Failure by any bank to exercise ordinary care with respect to the item, but a bank so failing remains liable.
(5) A failure to charge-back or claim refund does not affect other rights of the bank against the customer or any other party.
(6) If credit is given in dollars as the equivalent of the value of an item payable in a foreign money the dollar amount of any charge-back or refund shall be calculated on the basis of the bank-offered spot rate for the foreign money prevailing on the day when the person entitled to the charge-back or refund learns that it will not receive payment in ordinary course.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4215 - Final Payment of Items by Payor Bank; Final Credit; Availability of Credit for Withdrawal.

440.4215 Final payment of items by payor bank; final credit; availability of credit for withdrawal.
Sec. 4215.
(1) An item is finally paid by a payor bank when the bank has first done any of the following:
(a) Paid the item in cash.
(b) Settled for the item without having a right to revoke the settlement under statute, clearing-house rule or agreement.
(c) Made a provisional settlement for the item and failed to revoke the settlement in the time and manner permitted by statute, clearing-house rule or agreement.
(2) If provisional settlement for an item does not become final, the item is not finally paid.
(3) If provisional settlement for an item between the presenting and payor banks is made through a clearing-house or by debits or credits in an account between them, then to the extent that provisional debits or credits for the item are entered in accounts between the presenting and payor banks or between the presenting and successive prior collecting banks seriatim, they become final upon final payment of the items by the payor bank.
(4) If a collecting bank receives a settlement for an item which is or becomes final, the bank is accountable to its customer for the amount of the item and any provisional credit given for the item in an account with its customer becomes final.
(5) Subject to (i) applicable law stating a time for availability of funds and (ii) any right of the bank to apply the credit to an obligation of the customer, credit given by a bank for an item in a customer's account becomes available for withdrawal as of right if either of the following apply:
(a) The bank has received a provisional settlement for the item, when the settlement becomes final and the bank has had a reasonable time to receive return of the item and the item has not been received within that time.
(b) The bank is both the depositary bank and the payor bank and the item is finally paid, at the opening of the bank's second banking day following receipt of the item.
(6) Subject to applicable law stating a time for availability of funds and any right of a bank to apply a deposit to an obligation of the depositor, a deposit of money becomes available for withdrawal as of right at the opening of the bank's next banking day after receipt of the deposit.
History:
Add. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-2 - Part 2 Collection of Items: Depositary and Collecting Banks (440.4201...440.4216) › Section 440.4216 - Payor or Collecting Bank; Suspension of Payments.

440.4216 Payor or collecting bank; suspension of payments.
Sec. 4216.
(1) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item must be returned by the receiver, trustee, or agent in charge of the closed bank to the presenting bank or the closed bank's customer.
(2) If a payor bank finally pays an item and suspends payments without making a settlement for the item with its customer or the presenting bank which settlement is or becomes final, the owner of the item has a preferred claim against the payor bank.
(3) If a payor bank gives or a collecting bank gives or receives a provisional settlement for an item and thereafter suspends payments, the suspension does not prevent or interfere with the settlement's becoming final if the finality occurs automatically upon the lapse of certain time or the happening of certain events.
(4) If a collecting bank receives from subsequent parties settlement for an item, which settlement is or becomes final and the bank suspends payments without making a settlement for the item with its customer, which settlement is or becomes final, the owner of the item has a preferred claim against the collecting bank.
History:
Add. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-3 - Part 3 Collection of Items: Payor Banks (440.4301...440.4303) › Section 440.4301 - Demand Items; Recovery of Settlement; Time of Dishonor; Return of Items.

440.4301 Demand items; recovery of settlement; time of dishonor; return of items.
Sec. 4301.
(1) 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 does any of the following:
(a) Returns the item.
(b) 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.
(c) Sends a record providing notice of dishonor or nonpayment if the item is unavailable for return.
(2) 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 subsection (1).
(3) 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.
(4) An item is returned when 1 of the following occurs:
(a) As to an item presented through a clearing-house, when it is delivered to the presenting or last collecting bank or to the clearing-house or is sent or delivered in accordance with its rules.
(b) In all other cases, when it is sent or delivered to the bank's customer or transferor or pursuant to his or her instructions.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993 ;-- Am. 2014, Act 103, Imd. Eff. Apr. 10, 2014
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-3 - Part 3 Collection of Items: Payor Banks (440.4301...440.4303) › Section 440.4302 - Payor Bank; Accountability Upon Presentment and Receipt of Item; Defenses.

440.4302 Payor bank; accountability upon presentment and receipt of item; defenses.
Sec. 4302.
(1) If an item is presented on and received by a payor bank the bank is accountable for the amount of the following:
(a) A demand item other than a documentary draft whether properly payable or not if the bank, in any case where it is not also the depositary bank, retains the item beyond midnight of the banking day of receipt without settling for it or, regardless of whether it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline.
(b) Any other properly payable item unless within the time allowed for acceptance or payment of that item the bank either accepts or pays the item or returns it and accompanying documents.
(2) The liability of a payor bank to pay an item pursuant to subsection (1) is subject to defenses based on breach of a presentment warranty (section 4208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-3 - Part 3 Collection of Items: Payor Banks (440.4301...440.4303) › Section 440.4303 - Payor Bank; Items Subject to Knowledge Notice, Stop-Payment Order, Legal Process, or Setoff; Order in Which Times May Be Handled.

440.4303 Payor bank; items subject to knowledge notice, stop-payment order, legal process, or setoff; order in which times may be handled.
Sec. 4303.
(1) Any knowledge, notice, or stop-payment order received by, legal process served upon or setoff exercised by a payor bank comes too late to terminate, suspend, or modify the bank's right or duty to pay an item or to charge its customer's account for the item if the knowledge, notice, stop-payment order or legal process is received or served and a reasonable time for the bank to act thereon expires or the setoff is exercised after the earliest of the following:
(a) The bank accepts or certifies the item.
(b) The bank pays the item in cash.
(c) The bank settles for the item without having a right to revoke the settlement under statute, clearing-house rule or agreement.
(d) The bank becomes accountable for the amount of the item under section 4302 dealing with the payor bank's responsibility for late return of items.
(e) With respect to checks, a cutoff hour no earlier than 1 hour after the opening of the next banking day after the banking day on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of the next banking day after the banking day on which the bank received the check.
(2) Subject to subsection (1) items may be accepted, paid, certified, or charged to the indicated account of its customer in any order.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-4 - Part 4 Relationship Between Payor Bank and Its Customer (440.4401...440.4407) › Section 440.4401 - Payor Bank; Charge Against Customer's Account.

440.4401 Payor bank; charge against customer's account.
Sec. 4401.
(1) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in accordance with any agreement between the customer and bank.
(2) A customer is not liable for the amount of an overdraft if the customer neither signed the item nor benefited from the proceeds of the item.
(3) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in section 4403(2) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in section 4303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under section 4402.
(4) A bank that in good faith makes payment to a holder may charge the indicated account of its customer according to either of the following:
(a) The original terms of the altered item.
(b) The terms of the completed item, even though the bank knows the item has been completed unless the bank has notice that the completion was improper.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-4 - Part 4 Relationship Between Payor Bank and Its Customer (440.4401...440.4407) › Section 440.4402 - Payor Bank; Wrongful Dishonor; Liability to Customer; Determination of Account Balance.

440.4402 Payor bank; wrongful dishonor; liability to customer; determination of account balance.
Sec. 4402.
(1) Except as otherwise provided in this article, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft.
(2) A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. Liability is limited to actual damages proved and may include damages for an arrest or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be determined in each case.
(3) A payor bank's determination of the customer's account balance on which a decision to dishonor for insufficiency of available funds is based may be made at any time between the time the item is received by the payor bank and the time that the payor bank returns the item or gives notice in lieu of return, and no more than 1 determination need be made. If, at the election of the payor bank, a subsequent balance determination is made for the purpose of reevaluating the bank's decision to dishonor the item, the account balance at that time is determinative of whether a dishonor for insufficiency of available funds is wrongful.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
2023 Michigan Compiled Laws › Chapter 440 - Uniform Commercial Code › Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102) › Article 4 - Bank Deposits and Collections (440.4101...440.4504) › 174-1962-4-4 - Part 4 Relationship Between Payor Bank and Its Customer (440.4401...440.4407) › Section 440.4403 - Customer's Right to Stop Payment; Lapse and Renewal; Burden of Proof of Loss.

440.4403 Customer's right to stop payment; lapse and renewal; burden of proof of loss.
Sec. 4403.
(1) A customer or any person authorized to draw on the account if there is more than 1 person may stop payment of any item drawn on the customer's account or close the account by an order to the bank describing the item or account with reasonable certainty received at a time and in a manner that affords the bank a reasonable opportunity to act on it before any action by the bank with respect to the item described in section 4303. If the signature of more than 1 person is required to draw on an account, any of these persons may stop payment or close the account.
(2) A stop-payment order is effective for 6 months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in a record within that period. A stop-payment order may be renewed for additional 6-month periods by a record given to the bank within a period during which the stop-payment order is effective.
(3) The burden of establishing the fact and amount of loss resulting from the payment of an item contrary to a stop-payment order or order to close an account is on the customer. The loss from payment of an item contrary to a stop-payment order may include damages for dishonor of subsequent items under section 4402.
History:
1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993 ;-- Am. 2014, Act 103, Imd. Eff. Apr. 10, 2014