reglab/statecodes huggingface dataset:
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.201. Status of Collecting Bank as Agent and Provisional Status of Credits; Applicability of Chapter; Item Indorsed "Pay Any Bank"

Sec. 4.201.  STATUS OF COLLECTING BANK AS AGENT AND PROVISIONAL STATUS OF CREDITS;  APPLICABILITY OF CHAPTER;  ITEM INDORSED "PAY ANY BANK".  (a)  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of indorsement and even though credit given for the item is subject to immediate withdrawal as of right or is in fact withdrawn;  but the continuance of ownership of an item by its owner and any rights of the owner to proceeds of the item are subject to rights of a collecting bank, such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 recoupment or setoff.  If an item is handled by banks for purposes of presentment, payment, collection, or return, the relevant provisions of this chapter apply even though action of the parties clearly establishes that a particular bank has purchased the item and is the owner of it.
(b)  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:
(1)  returned to the customer initiating collection;  or
(2)  specially indorsed by a bank to a person who is not a bank.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.202. Responsibility for Collection or Return; When Action Timely

Sec. 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 non-payment 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;
(3)  settling for an item when the bank receives final settlement;  and
(4)  notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.
(b)  A collecting bank exercises ordinary care under Subsection (a) 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.
(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 loss or destruction of an item in the possession of others or in transit.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.203. Effect of Instructions

Sec. 4.203.  EFFECT OF INSTRUCTIONS.  Subject to Chapter 3 concerning conversion of instruments (Section 3.420) and restrictive indorsements (Section 3.206), 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.204. Methods of Sending and Presenting; Sending Directly to Payor Bank

Sec. 4.204.  METHODS OF SENDING AND PRESENTING;  SENDING DIRECTLY TO PAYOR BANK.  (a)  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.
(b)  A collecting bank may send:
(1)  an item directly to the payor bank;
(2)  an item to a non-bank payor if authorized by its transferor;  and
(3)  an item other than a documentary draft to a non-bank payor, if authorized by Federal Reserve regulation or operating circular, clearing-house rule, or the like.
(c)  Presentment may be made by a presenting bank at a place where the payor bank or other payor has requested that presentment be made.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.205. Depository Bank Holder of Unindorsed Item

Sec. 4.205.  DEPOSITORY BANK HOLDER OF UNINDORSED ITEM.  If a customer delivers an item to a depositary bank for collection, the depositary bank:
(1)  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 indorses the item, and, if the bank satisfies the other requirements of Section 3.302, the bank is a holder in due course;  and
(2)  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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.206. Transfer Between Banks

Sec. 4.206.  TRANSFER BETWEEN BANKS.  Any agreed method that identifies the transferor bank is sufficient for the item's further transfer to another bank.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.207. Transfer Warranties

Sec. 4.207.  TRANSFER WARRANTIES.  (a)  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 that:
(1)  the warrantor is a person entitled to enforce the item;
(2)  all signatures on the item are authentic and authorized;
(3)  the item has not been altered;
(4)  the item is not subject to a defense or claim in recoupment (Section 3.305(a)) of any party that can be asserted against the warrantor;
(5)  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; and
(6)  with respect to a remotely-created 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.
(b)  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 3.115 and 3.407.  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 indorsement stating that it is made "without recourse" or otherwise disclaiming liability.
(c)  A person to whom the warranties under Subsection (a) 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.
(d)  The warranties stated in Subsection (a) 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.
(e)  A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.
(f)  If the warranty under Subsection (a)(6) is not given by a transferor or collecting bank under applicable conflict of law rules, the warranty is not given to that transferor when that transferor is a transferee or to any prior collecting bank of that transferee.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996;  Acts 1997, 75th Leg., ch. 131, Sec. 5, eff. Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch. 95 (S.B. 1563), Sec. 16, eff. September 1, 2005.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.209. Encoding and Retention Warranties

Sec. 4.209.  ENCODING AND RETENTION WARRANTIES.  (a)  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.
(b)  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.
(c)  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.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.210. Security Interest of Collecting Bank in Items, Accompanying Documents and Proceeds

Sec. 4.210.  SECURITY INTEREST OF COLLECTING BANK IN ITEMS, ACCOMPANYING DOCUMENTS AND PROCEEDS.  (a)  A collecting bank has a security interest in an item and any accompanying documents or the proceeds of either:
(1)  in case of an item deposited in an account, to the extent to which credit given for the item has been withdrawn or applied;
(2)  in case of an item for which it has given credit available for withdrawal as of right, to the extent of the credit given, whether or not the credit is drawn upon or there is a right of charge-back;  or
(3)  if it makes an advance on or against the item.
(b)  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.
(c)  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 Chapter 9, but:
(1)  no security agreement is necessary to make the security interest enforceable (Section 9.203(b)(3)(A));
(2)  no filing is required to perfect the security interest; and
(3)  the security interest has priority over conflicting perfected security interests in the item, accompanying documents, or proceeds.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Renumbered from Sec. 4.208 and amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996;  Acts 1999, 76th Leg., ch. 414, Sec. 2.23, eff. July 1, 2001.
Amended by:
Acts 2005, 79th Leg., Ch. 122 (S.B. 1593), Sec. 17, eff. September 1, 2005.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.211. When Bank Gives Value for Purposes of Holder in Due Course

Sec. 4.211.  WHEN BANK GIVES VALUE FOR PURPOSES OF HOLDER IN DUE COURSE.  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 3.302 on what constitutes a holder in due course.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Renumbered from Sec. 4.209 and amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.212. Presentment by Notice of Item Not Payable By, Through or at a Bank; Liability of Drawer or Indorser

Sec. 4.212.  PRESENTMENT BY NOTICE OF ITEM NOT PAYABLE BY, THROUGH OR AT A BANK;  LIABILITY OF DRAWER OR INDORSER.  (a)  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 3.501 by the close of the bank's next banking day after it knows of the requirement.
(b)  If presentment is made by notice and payment, acceptance, or request for compliance with a requirement under Section 3.501 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 indorser by sending it notice of the facts.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Renumbered from Sec. 4.210 and amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
Amended by:
Acts 2005, 79th Leg., Ch. 95 (S.B. 1563), Sec. 18, eff. September 1, 2005.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.213. Medium and Time of Settlement by Bank

Sec. 4.213.  MEDIUM AND TIME OF SETTLEMENT BY BANK.  (a)  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 by agreement.  In the absence of such a prescription:
(1)  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;  and
(2)  the time of settlement is:
(A)  with respect to tender of settlement by cash, a cashier's check, or a teller's check, when the cash or check is sent or delivered;
(B)  with respect to tender of settlement by credit to an account in a Federal Reserve bank, when the credit is made;
(C)  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;  or
(D)  with respect to tender of settlement by a funds transfer, when payment is made pursuant to Section 4A.406(a) to the person receiving settlement.
(b)  If the tender of settlement is not by a medium authorized by Subsection (a) or the time of settlement is not fixed by Subsection (a), a settlement does not occur until the tender of settlement is accepted by the person receiving settlement.
(c)  If settlement for an item is made by cashier's check or teller's check and the person receiving settlement, before its midnight deadline:
(1)  presents or forwards the check for collection, settlement is final when the check is finally paid;  or
(2)  fails to present or forward the check for collection, settlement is final at the midnight deadline of the person receiving settlement.
(d)  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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1983, 68th Leg., p. 1531, ch. 290, Sec. 4, eff. Aug. 29, 1983.  Renumbered from Sec. 4.211 and amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.214. Right of Charge-Back or Refund; Liability of Collecting Bank; Return of Item

Sec. 4.214.  RIGHT OF CHARGE-BACK OR REFUND;  LIABILITY OF COLLECTING BANK;  RETURN OF ITEM.  (a)  If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive settlement for the item that 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 item, 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 refund from its customers, 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.
(b)  A collecting bank returns an item when it is sent or delivered to the bank's customer or transferor or pursuant to its instructions.
(c)  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 4.301).
(d)  The right to charge-back is not affected by:
(1)  previous use of a credit given for the item;  or
(2)  failure by any bank to exercise ordinary care with respect to the item, but a bank so failing remains liable.
(e)  A failure to charge-back or claim refund does not affect other rights of the bank against the customer or any other party.
(f)  If credit is given in dollars as the equivalent of the value of an item payable in foreign money, the dollar amount of any charge-back or refund must 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Renumbered from Sec. 4.212 and amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.215. Final Payment of Item by Payor Bank; When Provisional Debits and Credits Become Final; When Certain Credits Become Available for Withdrawal

Sec. 4.215.  FINAL PAYMENT OF ITEM BY PAYOR BANK;  WHEN PROVISIONAL DEBITS AND CREDITS BECOME FINAL;  WHEN CERTAIN CREDITS BECOME AVAILABLE FOR WITHDRAWAL.  (a)  An item is finally paid by a payor bank when the bank has first done any of the following:
(1)  paid the item in cash;
(2)  settled for the item without having a right to revoke the settlement under statute, clearing-house rule, or agreement;  or
(3)  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.
(b)  If provisional settlement for an item does not become final, the item is not finally paid.
(c)  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 item by the payor bank.
(d)  If a collecting bank receives a settlement for an item that 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.
(e)  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 the bank:
(1)  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;  or
(2)  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.
(f)  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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1985, 69th Leg., ch. 621, Sec. 1, eff. June 14, 1985.  Renumbered from Sec. 4.213 and amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter B. Collection of Items: Depositary and Collecting Banks › Section 4.216. Insolvency and Preference

Sec. 4.216.  INSOLVENCY AND PREFERENCE.  (a)  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.
(b)  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.
(c)  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.
(d)  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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Renumbered from Sec. 4.214 and amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter C. Collection of Items: Payor Banks › Section 4.301. Deferred Posting; Recovery of Payment by Return of Items; Time of Dishonor; Return of Items by Payor Bank

Sec. 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 for return.
(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 Subsection (a).
(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 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 clearing-house rules;  or
(2)  in all other cases, when it is sent or delivered to the bank's customer or transferor or pursuant to instructions.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
Amended by:
Acts 2005, 79th Leg., Ch. 95 (S.B. 1563), Sec. 19, eff. September 1, 2005.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter C. Collection of Items: Payor Banks › Section 4.302. Payor Bank's Responsibility for Late Return of Item

Sec. 4.302.  PAYOR BANK'S RESPONSIBILITY FOR LATE RETURN OF ITEM.  (a)  If an item is presented to and received by a payor bank, the bank is accountable for the amount of:
(1)  a demand item, other than a documentary draft, whether properly payable or not, if the bank, in any case in which it is not also the depositary bank, retains the item beyond midnight of the banking day of receipt without settling for it or, whether or not it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline;  or
(2)  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.
(b)  The liability of a payor bank to pay an item pursuant to Subsection (a) is subject to defenses based on breach of a presentment warranty (Section 4.208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter C. Collection of Items: Payor Banks › Section 4.303. When Items Subject to Notice, Stop-Payment Order, Legal Process, or Setoff; Order in Which Items May Be Charged or Certified

Sec. 4.303.  WHEN ITEMS SUBJECT TO NOTICE, STOP-PAYMENT ORDER, LEGAL PROCESS, OR SETOFF;  ORDER IN WHICH ITEMS MAY BE CHARGED OR CERTIFIED.  (a)  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:
(1)  the bank accepts or certifies the item;
(2)  the bank pays the item in cash;
(3)  the bank settles for the item without having a right to revoke the settlement under statute, clearing-house rule, or agreement;
(4)  the bank becomes accountable for the amount of the item under Section 4.302 dealing with the payor bank's responsibility for late return of items;  or
(5)  with respect to checks, a cutoff hour not earlier than one hour after the opening of the next banking day after the banking day on which the bank received the check and not 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.
(b)  Subject to Subsection (a), items may be accepted, paid, certified, or charged to the indicated account of a bank's customer in any order and before or after the bank's regular banking hours.  A bank is under no obligation to determine the time of day an item is received and without liability may withhold the amount thereof pending a determination of the effect, consequence or priority of any knowledge, notice, stop-payment order, or legal process concerning the same, or interplead such amount and the claimants thereto.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1985, 69th Leg., ch. 621, Sec. 2, eff. June 14, 1985;  Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter D. Relationship Between Payor Bank and Its Customer › Section 4.401. When Bank May Charge Customer's Account

Sec. 4.401.  WHEN BANK MAY CHARGE CUSTOMER'S ACCOUNT.  (a)  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 the bank.
(b)  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.
(c)  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 4.403(b) 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 4.303.  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 4.402.
(d)  A bank that in good faith makes payment to a holder may charge the indicated account of its customer according to:
(1)  the original terms of the altered item;  or
(2)  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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter D. Relationship Between Payor Bank and Its Customer › Section 4.402. Bank's Liability to Customer for Wrongful Dishonor

Sec. 4.402.  BANK'S LIABILITY TO CUSTOMER FOR WRONGFUL DISHONOR.  (a)  Except as otherwise provided by this chapter, 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.
(b)  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.
(c)  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 one 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter D. Relationship Between Payor Bank and Its Customer › Section 4.403. Customer's Right to Stop Payment; Burden of Proof of Loss

Sec. 4.403.  CUSTOMER'S RIGHT TO STOP PAYMENT;  BURDEN OF PROOF OF LOSS.  (a)  A customer or any person authorized to draw on the account if there is more than one 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 4.303.  If the signature of more than one person is required to draw on an account, any of those persons may stop payment or close the account.
(b)  A stop-payment order is effective for six months and is binding on the bank only if it is in a dated, authenticated record that describes the item with certainty.  A stop-payment order may be renewed for additional six-month periods by an authenticated record given to the bank within a period during which the stop-payment order is effective.
(c)  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 4.402.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
Amended by:
Acts 2005, 79th Leg., Ch. 95 (S.B. 1563), Sec. 20, eff. September 1, 2005.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter D. Relationship Between Payor Bank and Its Customer › Section 4.404. Bank Not Obligated to Pay Check More Than Six Months Old

Sec. 4.404.  BANK NOT OBLIGATED TO PAY CHECK MORE THAN SIX MONTHS OLD.  A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, that is presented more than six months after its date, but it may charge its customer's account for a payment made thereafter in good faith.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter D. Relationship Between Payor Bank and Its Customer › Section 4.405. Death or Incompetence of Customer

Sec. 4.405.  DEATH OR INCOMPETENCE OF CUSTOMER.  (a)  A payor or collecting bank's authority to accept, pay, or collect an item or to account for proceeds of its collection, if otherwise effective, is not rendered ineffective by the incompetence of a customer of either bank existing at the time the item is issued or its collection is undertaken if the bank does not know of an adjudication of incompetence.  Neither death nor incompetence of a customer revokes the authority to accept, pay, collect, or account until the bank knows of the fact of death or of an adjudication of incompetence and has reasonable opportunity to act on it.
(b)  Even with knowledge, a bank may for 10 days after the date of death pay or certify checks drawn on or before that date unless ordered to stop payment by a person claiming an interest in the account.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter D. Relationship Between Payor Bank and Its Customer › Section 4.407. Payor Bank's Right to Subrogation on Improper Payment

Sec. 4.407.  PAYOR BANK'S RIGHT TO SUBROGATION ON IMPROPER PAYMENT.  If a payor bank has paid an item over the order of the drawer or maker to stop payment, or after an account has been closed, or otherwise under circumstances giving a basis for objection by the drawer or maker, to prevent unjust enrichment and only to the extent necessary to prevent loss to the bank by reason of its payment of the item, the payor bank is subrogated to the rights:
(1)  of any holder in due course on the item against the drawer or maker;
(2)  of the payee or any other holder of the item against the drawer or maker either on the item or under the transaction out of which the item arose;  and
(3)  of the drawer or maker against the payee or any other holder of the item with respect to the transaction out of which the item arose.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter E. Collection of Documentary Drafts › Section 4.501. Handling of Documentary Drafts; Duty to Send for Presentment and to Notify Customer of Dishonor

Sec. 4.501.  HANDLING OF DOCUMENTARY DRAFTS;  DUTY TO SEND FOR PRESENTMENT AND TO NOTIFY CUSTOMER OF DISHONOR.  A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and, upon learning that the draft has not been paid or accepted in due course, shall seasonably notify its customer of the fact even though it may have discounted or bought the draft or extended credit available for withdrawal as of right.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter E. Collection of Documentary Drafts › Section 4.502. Presentment of "On Arrival" Drafts

Sec. 4.502.  PRESENTMENT OF "ON ARRIVAL" DRAFTS.  If a draft or the relevant instructions require presentment "on arrival", "when goods arrive", or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired.  Refusal to pay or accept because the goods have not arrived is not dishonor;  the bank must notify its transferor of the refusal but need not present the draft again until it is instructed to do so or learns of the arrival of the goods.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter E. Collection of Documentary Drafts › Section 4.503. Responsibility of Presenting Bank for Documents and Goods; Report of Reasons for Dishonor; Referee in Case of Need

Sec. 4.503.  RESPONSIBILITY OF PRESENTING BANK FOR DOCUMENTS AND GOODS;  REPORT OF REASONS FOR DISHONOR;  REFEREE IN CASE OF NEED.  Unless otherwise instructed and except as provided in Chapter 5, a bank presenting a documentary draft:
(1)  must deliver the documents to the drawee on acceptance of the draft if it is payable more than three days after presentment;  otherwise, only on payment;  and
(2)  upon dishonor, either in the case of presentment for acceptance or presentment for payment, may seek and follow instructions from any referee in case of need designated in the draft or, if the presenting bank does not choose to utilize the referee's services, it must use diligence and good faith to ascertain the reason for dishonor, must notify its transferor of the dishonor and of the results of its effort to ascertain the reasons therefor, and must request instructions.
However, the presenting bank is under no obligation with respect to goods represented by the documents except to follow any reasonable instructions seasonably received;  it has a right to reimbursement for any expense incurred in following instructions and to prepayment of or indemnity for those expenses.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter E. Collection of Documentary Drafts › Section 4.504. Privilege of Presenting Bank to Deal With Goods; Security Interest for Expenses

Sec. 4.504.  PRIVILEGE OF PRESENTING BANK TO DEAL WITH GOODS;  SECURITY INTEREST FOR EXPENSES.  (a)  A presenting bank that, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell, or otherwise deal with the goods in any reasonable manner.
(b)  For its reasonable expenses incurred by action under Subsection (a) the presenting bank has a lien upon the goods or their proceeds, which may be foreclosed in the same manner as an unpaid seller's lien.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4A - Funds Transfers › Subchapter A. Subject Matter and Definitions › Section 4A.101. Short Title

Sec. 4A.101.  SHORT TITLE.  This chapter may be cited as Uniform Commercial Code--Funds Transfers.
Added by Acts 1993, 73rd Leg., ch. 570, Sec. 7, eff. Sept. 1, 1993.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4A - Funds Transfers › Subchapter A. Subject Matter and Definitions › Section 4A.102. Subject Matter

Sec. 4A.102.  SUBJECT MATTER.  Except as otherwise provided in Section 4A.108, this chapter applies to funds transfers defined in Section 4A.104.
Added by Acts 1993, 73rd Leg., ch. 570, Sec. 7, eff. Sept. 1, 1993.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4A - Funds Transfers › Subchapter A. Subject Matter and Definitions › Section 4A.103. Payment Order--Definitions

Sec. 4A.103.  PAYMENT ORDER--DEFINITIONS.  (a)  In this chapter:
(1)  "Payment order" means an instruction of a sender to a receiving bank, transmitted orally, electronically, or in writing, to pay, or to cause another bank to pay, a fixed or determinable amount of money to a beneficiary if:
(A)  the instruction does not state a condition of payment to the beneficiary other than the time of payment;
(B)  the receiving bank is to be reimbursed by debiting an account of, or otherwise receiving payment from, the sender;  and
(C)  the instruction is transmitted by the sender directly to the receiving bank or to an agent, funds transfer system, or communication system for transmittal to the receiving bank.
(2)  "Beneficiary" means the person to be paid by the beneficiary's bank.
(3)  "Beneficiary's bank" means the bank identified in a payment order in which an account of the beneficiary is to be credited pursuant to the order or which otherwise is to make payment to the beneficiary if the order does not provide for payment to an account.
(4)  "Receiving bank" means the bank to which the sender's instruction is addressed.
(5)  "Sender" means the person giving the instruction to the receiving bank.
(b)  If an instruction complying with Subsection (a)(1) is to make more than one payment to a beneficiary, the instruction is a separate payment order with respect to each payment.
(c)  A payment order is issued when it is sent to the receiving bank.
Added by Acts 1993, 73rd Leg., ch. 570, Sec. 7, eff. Sept. 1, 1993.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4A - Funds Transfers › Subchapter A. Subject Matter and Definitions › Section 4A.104. Funds Transfer--Definitions

Sec. 4A.104.  FUNDS TRANSFER--DEFINITIONS.  In this chapter:
(1)  "Funds transfer" means the series of transactions, beginning with the originator's payment order, made for the purpose of making payment to the beneficiary of the order.  The term includes any payment order issued by the originator's bank or an intermediary bank intended to carry out the originator's payment order.  A funds transfer is completed by acceptance by the beneficiary's bank of a payment order for the benefit of the beneficiary of the originator's payment order.
(2)  "Intermediary bank" means a receiving bank other than the originator's bank or the beneficiary's bank.
(3)  "Originator" means the sender of the first payment order in a funds transfer.
(4)  "Originator's bank" means:
(A)  the receiving bank to which the payment order of the originator is issued if the originator is not a bank;  or
(B)  the originator if the originator is a bank.
Added by Acts 1993, 73rd Leg., ch. 570, Sec. 7, eff. Sept. 1, 1993.