reglab/statecodes huggingface dataset:
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.405. Employer's Responsibility for Fraudulent Indorsement by Employee

Sec. 3.405.  EMPLOYER'S RESPONSIBILITY FOR FRAUDULENT INDORSEMENT BY EMPLOYEE.  (a)  In this section:
(1)  "Employee" includes an independent contractor and employee of an independent contractor retained by the employer.
(2)  "Fraudulent indorsement" means:
(A)  in the case of an instrument payable to the employer, a forged indorsement purporting to be that of the employer;  or
(B)  in the case of an instrument with respect to which the employer is the issuer, a forged indorsement purporting to be that of the person identified as payee.
(3)  "Responsibility" with respect to instruments means authority (i) to sign or indorse instruments on behalf of the employer, (ii) to process instruments received by the employer for bookkeeping purposes, for deposit to an account, or for other disposition, (iii) to prepare or process instruments for issue in the name of the employer, (iv) to supply information determining the names or addresses of payees of instruments to be issued in the name of the employer, (v) to control the disposition of instruments to be issued in the name of the employer, or (vi) to act otherwise with respect to instruments in a responsible capacity. "Responsibility" does not include authority that merely allows an employee to have access to instruments or blank or incomplete instrument forms that are being stored or transported or are part of incoming or outgoing mail, or similar access.
(b)  For the purpose of determining the rights and liabilities of a person who, in good faith, pays an instrument or takes it for value or for collection, if an employer entrusted an employee with responsibility with respect to the instrument and the employee or a person acting in concert with the employee makes a fraudulent indorsement of the instrument, the indorsement is effective as the indorsement of the person to whom the instrument is payable if it is made in the name of that person.  If the person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure contributes to loss resulting from the fraud, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss.
(c)  Under Subsection (b), an indorsement is made in the name of the person to whom an instrument is payable if:
(1)  it is made in a name substantially similar to the name of that person;  or
(2)  the instrument, whether or not indorsed, is deposited in a depositary bank to an account in a name substantially similar to the name of that person.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.406. Negligence Contributing to Forged Signature or Alteration of Instrument

Sec. 3.406.  NEGLIGENCE CONTRIBUTING TO FORGED SIGNATURE OR ALTERATION OF INSTRUMENT.  (a)  A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or the forgery against a person who, in good faith, pays the instrument or takes it for value or for collection.
(b)  Under Subsection (a), if the person asserting the preclusion fails to exercise ordinary care in paying or taking the instrument and that failure contributes to loss, the loss is allocated between the person precluded and the person asserting the preclusion according to the extent to which the failure of each to exercise ordinary care contributed to the loss.
(c)  Under Subsection (a), the burden of proving failure to exercise ordinary care is on the person asserting the preclusion.  Under Subsection (b), the burden of proving failure to exercise ordinary care is on the person precluded.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.407. Alteration

Sec. 3.407.  ALTERATION.  (a)  "Alteration" means:
(1)  an unauthorized change in an instrument that purports to modify in any respect the obligation of a party;  or
(2)  an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party.
(b)  Except as provided in Subsection (c), an alteration fraudulently made discharges a party whose obligation is affected by the alteration unless that party assents or is precluded from asserting the alteration.  No other alteration discharges a party, and the instrument may be enforced according to its original terms.
(c)  A payor bank or drawee paying a fraudulently altered instrument or a person taking it for value, in good faith and without notice of the alteration, may enforce rights with respect to the instrument:
(1)  according to its original terms;  or
(2)  in the case of an incomplete instrument altered by unauthorized completion, according to its terms as completed.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.408. Drawee Not Liable on Unaccepted Draft

Sec. 3.408.  DRAWEE NOT LIABLE ON UNACCEPTED DRAFT.  A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.409. Acceptance of Draft; Certified Check

Sec. 3.409.  ACCEPTANCE OF DRAFT;  CERTIFIED CHECK.  (a)  "Acceptance" means the drawee's signed agreement to pay a draft as presented.  It must be written on the draft and may consist of the drawee's signature alone.  Acceptance may be made at any time and becomes effective when notification pursuant to instructions is given or the accepted draft is delivered for the purpose of giving rights on the acceptance to any person.
(b)  A draft may be accepted although it has not been signed by the drawer, is otherwise incomplete, is overdue, or has been dishonored.
(c)  If a draft is payable at a fixed period after sight and the acceptor fails to date the acceptance, the holder may complete the acceptance by supplying a date in good faith.
(d)  "Certified check" means a check accepted by the bank on which it is drawn.  Acceptance may be made as stated in Subsection (a) or by a writing on the check that indicates that the check is certified.  The drawee of a check has no obligation to certify the check, and refusal to certify is not dishonor of the check.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.410. Acceptance Varying Draft

Sec. 3.410.  ACCEPTANCE VARYING DRAFT.  (a)  If the terms of a drawee's acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat the draft as dishonored.  In that case, the drawee may cancel the acceptance.
(b)  The terms of a draft are not varied by an acceptance to pay at a particular bank or place in the United States, unless the acceptance states that the draft is to be paid only at that bank or place.
(c)  If the holder assents to an acceptance varying the terms of a draft, the obligation of each drawer and indorser that does not expressly assent to the acceptance is discharged.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.411. Refusal to Pay Cashier's Checks, Teller's Checks, and Certified Checks

Sec. 3.411.  REFUSAL TO PAY CASHIER'S CHECKS, TELLER'S CHECKS, AND CERTIFIED CHECKS.  (a)  In this section, "obligated bank" means the acceptor of a certified check or the issuer of a cashier's check or teller's check bought from the issuer.
(b)  If the obligated bank wrongfully (i) refuses to pay a cashier's check or certified check, (ii) stops payment of a teller's check, or (iii) refuses to pay a dishonored teller's check, the person asserting the right to enforce the check is entitled to compensation for expenses and loss of interest resulting from the nonpayment and may recover consequential damages if the obligated bank refuses to pay after receiving notice of particular circumstances giving rise to the damages.
(c)  Expenses or consequential damages under Subsection (b) are not recoverable if the refusal of the obligated bank to pay occurs because:
(1)  the obligated bank suspends payments;
(2)  the obligated bank asserts a claim or defense of the bank that it has reasonable grounds to believe is available against the person entitled to enforce the instrument;
(3)  the obligated bank has a reasonable doubt whether the person demanding payment is the person entitled to enforce the instrument;  or
(4)  payment is prohibited by law.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.412. Obligation of Issuer of Note or Cashier's Check

Sec. 3.412.  OBLIGATION OF ISSUER OF NOTE OR CASHIER'S CHECK.  The issuer of a note or cashier's check or other draft drawn on the drawer is obliged to pay the instrument (i) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder, or (ii) if the issuer signed an incomplete instrument, according to its terms when completed, to the extent stated in Sections 3.115 and 3.407.  The obligation is owed to a person entitled to enforce the instrument or to an indorser who paid the instrument under Section 3.415.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.413. Obligation of Acceptor

Sec. 3.413.  OBLIGATION OF ACCEPTOR.  (a)  The acceptor of a draft is obliged to pay the draft (i) according to its terms at the time it was accepted, even though the acceptance states that the draft is payable "as originally drawn" or equivalent terms, (ii) if the acceptance varies the terms of the draft, according to the terms of the draft as varied, or (iii) if the acceptance is of a draft that is an incomplete instrument, according to its terms when completed, to the extent stated in Sections 3.115 and 3.407.  The obligation is owed to a person entitled to enforce the draft or to the drawer or an indorser who paid the draft under Section 3.414 or 3.415.
(b)  If the certification of a check or other acceptance of a draft states the amount certified or accepted, the obligation of the acceptor is that amount.  The obligation of the acceptor is the amount of the instrument at the time it was taken by the holder in due course if:
(1)  the certification or acceptance does not state an amount;
(2)  the amount of the instrument is subsequently raised;  and
(3)  the instrument is then negotiated to a holder in due course.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.414. Obligation of Drawer

Sec. 3.414.  OBLIGATION OF DRAWER.  (a)  This section does not apply to cashier's checks or other drafts drawn on the drawer.
(b)  If an unaccepted draft is dishonored, the drawer is obliged to pay the draft (i) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder, or (ii) if the drawer signed an incomplete instrument, according to its terms when completed, to the extent stated in Sections 3.115 and 3.407.  The obligation is owed to a person entitled to enforce the draft or to an indorser who paid the draft under Section 3.415.
(c)  If a draft is accepted by a bank, the drawer is discharged, regardless of when or by whom acceptance was obtained.
(d)  If a draft is accepted and the acceptor is not a bank, the obligation of the drawer to pay the draft if the draft is dishonored by the acceptor is the same as the obligation of an indorser under Sections 3.415(a) and (c).
(e)  If a draft states that it is drawn "without recourse" or otherwise disclaims liability of the drawer to pay the draft, the drawer is not liable under Subsection (b) to pay the draft if the draft is not a check.  A disclaimer of the liability stated in Subsection (b) is not effective if the draft is a check.
(f)  If (i) a check is not presented for payment or given to a depositary bank for collection within 30 days after its date, (ii) the drawee suspends payments after expiration of the 30-day period without paying the check, and (iii) because of the suspension of payments, the drawer is deprived of funds maintained with the drawee to cover payment of the check, the drawer to the extent deprived of funds may discharge its obligation to pay the check by assigning to the person entitled to enforce the check the rights of the drawer against the drawee with respect to the funds.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.415. Obligation of Indorser

Sec. 3.415.  OBLIGATION OF INDORSER.  (a)  Subject to Subsections (b), (c), (d), and (e) and to Section 3.419(d), if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument (i) according to the terms of the instrument at the time it was indorsed, or (ii) if the indorser indorsed an incomplete instrument, according to its terms when completed, to the extent stated in Sections 3.115 and 3.407.  The obligation of the indorser is owed to a person entitled to enforce the instrument or to a subsequent indorser who paid the instrument under this section.
(b)  If an indorsement states that it is made "without recourse" or otherwise disclaims liability of the indorser, the indorser is not liable under Subsection (a) to pay the instrument.
(c)  If notice of dishonor of an instrument is required by Section 3.503 and notice of dishonor complying with that section is not given to an indorser, the liability of the indorser under Subsection (a) is discharged.
(d)  If a draft is accepted by a bank after an indorsement is made, the liability of the indorser under Subsection (a) is discharged.
(e)  If an indorser of a check is liable under Subsection (a) and the check is not presented for payment, or given to a depositary bank for collection, within 30 days after the day the indorsement was made, the liability of the indorser under Subsection (a) is discharged.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.416. Transfer Warranties

Sec. 3.416.  TRANSFER WARRANTIES.  (a)  A person who transfers an instrument for consideration warrants to the transferee and, if the transfer is by indorsement, to any subsequent transferee that:
(1)  the warrantor is a person entitled to enforce the instrument;
(2)  all signatures on the instrument are authentic and authorized;
(3)  the instrument has not been altered;
(4)  the instrument is not subject to a defense or claim in recoupment 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)  A person to whom the warranties under Subsection (a) are made and who took the instrument 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 instrument plus expenses and loss of interest incurred as a result of the breach.
(c)  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 liability of the warrantor under Subsection (b) is discharged to the extent of any loss caused by the delay in giving notice of the claim.
(d)  A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.
(e)  If as to a particular item (1) a transferee (including a collecting bank) asserts a claim for breach of the warranty in Subsection (a)(6), but (2) under applicable law (including the applicable choice-of-law principles) that transferee would not make a warranty substantially similar to the warranty in Subsection (a)(6) if such transferee were a transferor, then that transferee would not receive the warranty in Subsection (a)(6) from any transferor.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996;  Acts 1997, 75th Leg., ch. 131, Sec. 3, eff. Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch. 95 (S.B. 1563), Sec. 8, eff. September 1, 2005.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.418. Payment or Acceptance by Mistake

Sec. 3.418.  PAYMENT OR ACCEPTANCE BY MISTAKE.  (a)  Except as provided in Subsection (c), if the drawee of a draft pays or accepts the draft and the drawee acted on the mistaken belief that (i) payment of the draft had not been stopped pursuant to Section 4.403, or (ii) the signature of the drawer of the draft was authorized, the drawee may recover the amount of the draft from the person to whom or for whose benefit payment was made or, in the case of acceptance, may revoke the acceptance.  Rights of the drawee under this subsection are not affected by failure of the drawee to exercise ordinary care in paying or accepting the draft.
(b)  Except as provided in Subsection (c), if an instrument has been paid or accepted by mistake and the case is not covered by Subsection (a), the person paying or accepting may, to the extent permitted by the law governing mistake and restitution:
(1)  recover the payment from the person to whom or for whose benefit payment was made;  or
(2)  in the case of acceptance, revoke the acceptance.
(c)  The remedies provided by Subsection (a) or (b) may not be asserted against a person who took the instrument in good faith and for value or who in good faith changed position in reliance on the payment or acceptance.  This subsection does not limit remedies provided by Section 3.417 or 4.407.
(d)  Notwithstanding Section 4.215, if an instrument is paid or accepted by mistake and the payor or acceptor recovers payment or revokes acceptance under Subsection (a) or (b), the instrument is deemed not to have been paid or accepted and is treated as dishonored, and the person from whom payment is recovered has rights as a person entitled to enforce the dishonored instrument.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter D. Liability of Parties › Section 3.420. Conversion of Instrument

Sec. 3.420.  CONVERSION OF INSTRUMENT.  (a)  The law applicable to conversion of personal property applies to instruments.  An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment.  An action for conversion of an instrument may not be brought by:
(1)  the issuer or acceptor of the instrument;  or
(2)  a payee or indorsee who did not receive delivery of the instrument either directly or through delivery to an agent or a co-payee.
(b)  In an action under Subsection (a), the measure of liability is presumed to be the amount payable on the instrument, but recovery may not exceed the amount of the plaintiff's interest in the instrument.
(c)  A representative, other than a depositary bank, who has in good faith dealt with an instrument or its proceeds on behalf of one who was not the person entitled to enforce the instrument is not liable in conversion to that person beyond the amount of any proceeds that it has not paid out.
Added by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter E. Dishonor › Section 3.501. Presentment

Sec. 3.501.  PRESENTMENT.  (a)  "Presentment" means a demand made by or on behalf of a person entitled to enforce an instrument to:
(1)  pay the instrument made to the drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft payable at a bank, to the bank;  or
(2)  accept a draft made to the drawee.
(b)  The following rules are subject to Chapter 4, agreement of the parties, and clearing-house rules and the like:
(1)  Presentment may be made at the place of payment of the instrument and must be made at the place of payment if the instrument is payable at a bank in the United States.  Presentment may be made by any commercially reasonable means, including an oral, written, or electronic communication.  Presentment is effective:
(A)  when the demand for payment or acceptance is received by the person to whom presentment is made;  and
(B)  if made to any one of two or more makers, acceptors, drawees, or other payors.
(2)  On demand of the person to whom presentment is made, the person making presentment must:
(A)  exhibit the instrument;
(B)  give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so;  and
(C)  sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made.
(3)  Without dishonoring the instrument, the party to whom presentment is made may:
(A)  return the instrument for lack of a necessary indorsement;  or
(B)  refuse payment or acceptance for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule.
(4)  The party to whom presentment is made may treat presentment as occurring on the next business day after the day of presentment if the party to whom presentment is made has established a cutoff hour not earlier than 2 p.m. for the receipt and processing of instruments presented for payment or acceptance and presentment is made after the cutoff hour.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter E. Dishonor › Section 3.503. Notice of Dishonor

Sec. 3.503.  NOTICE OF DISHONOR.  (a)  The obligation of an indorser stated in Section 3.415(a) and the obligation of a drawer stated in Section 3.414(d) may not be enforced unless:
(1)  the indorser or drawer is given notice of dishonor of the instrument complying with this section;  or
(2)  notice of dishonor is excused under Section 3.504(b).
(b)  Notice of dishonor may be given by any person;  may be given by any commercially reasonable means, including an oral, written, or electronic communication;  and is sufficient if it reasonably identifies the instrument and indicates that the instrument has been dishonored or has not been paid or accepted.  Return of an instrument given to a bank for collection is sufficient notice of dishonor.
(c)  Subject to Section 3.504(c), with respect to an instrument taken for collection by a collecting bank, notice of dishonor must be given (i) by the bank before midnight of the next banking day following the banking day on which the bank receives notice of dishonor of the instrument, or (ii) by any other person within 30 days following the day on which the person receives notice of dishonor.  With respect to any other instrument, notice of dishonor must be given within 30 days following the day on which dishonor occurs.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter E. Dishonor › Section 3.504. Excused Presentment and Notice of Dishonor

Sec. 3.504.  EXCUSED PRESENTMENT AND NOTICE OF DISHONOR.  (a)  Presentment for payment or acceptance of an instrument is excused if:
(1)  the person entitled to present the instrument cannot with reasonable diligence make presentment;
(2)  the maker or acceptor has repudiated an obligation to pay the instrument or is dead or in insolvency proceedings;
(3)  by the terms of the instrument presentment is not necessary to enforce the obligation of indorsers or the drawer;
(4)  the drawer or indorser whose obligation is being enforced has waived presentment or otherwise has no reason to expect or right to require that the instrument be paid or accepted;  or
(5)  the drawer instructed the drawee not to pay or accept the draft or the drawee was not obligated to the drawer to pay the draft.
(b)  Notice of dishonor is excused if (i) by the terms of the instrument notice of dishonor is not necessary to enforce the obligation of a party to pay the instrument, or (ii) the party whose obligation is being enforced waived notice of dishonor.  A waiver of presentment is also a waiver of notice of dishonor.
(c)  Delay in giving notice of dishonor is excused if the delay was caused by circumstances beyond the control of the person giving the notice and the person giving the notice exercised reasonable diligence after the cause of the delay ceased to operate.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter E. Dishonor › Section 3.505. Evidence of Dishonor

Sec. 3.505.  EVIDENCE OF DISHONOR.  (a)  The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated:
(1)  a document regular in form as provided in Subsection (b) that purports to be a protest;
(2)  a purported stamp or writing of the drawee, payor bank, or presenting bank on or accompanying the instrument stating that acceptance or payment has been refused unless reasons for the refusal are stated and the reasons are not consistent with dishonor;
(3)  a book or record of the drawee, payor bank, or collecting bank that is kept in the usual course of business and that shows dishonor, even if there is no evidence of who made the entry.
(b)  A protest is a certificate of dishonor made by a United States consul or vice consul, or a notary public or other person authorized to administer oaths by the law of the place where dishonor occurs.  It may be made on information satisfactory to that person.  The protest must identify the instrument and certify either that presentment has been made or, if not made, the reason why it was not made, and that the instrument has been dishonored by nonacceptance or nonpayment.  The protest may also certify that notice of dishonor has been given to some or all parties.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter E. Dishonor › Section 3.506. Processing Fee by Holder of Payment Device

Sec. 3.506.  PROCESSING FEE BY HOLDER OF PAYMENT DEVICE.  (a)  For purposes of this section, "payment device" means any check, item, paper or electronic payment, or other payment device used as a medium for payment.
(b)  On return of a payment device to the holder following dishonor of the payment device by a payor, the holder, the holder's assignee, agent, or representative, or any other person retained by the holder to seek collection of the face value of the dishonored payment device may charge the drawer or indorser a maximum processing fee of $30.
(c)  A person may not charge a processing fee to a drawer or indorser under this section if a reimbursement fee has been collected under Article 102.007(e), Code of Criminal Procedure.  If a processing fee has been collected under this section and the holder subsequently receives a reimbursement fee collected under Article 102.007(e), Code of Criminal Procedure, the holder shall immediately refund the fee previously collected from the drawer or indorser.
(d)  Notwithstanding Subtitle B, Title 4, Finance Code, or any other law, a contract made under Subtitle B, Title 4, Finance Code, may provide that on return of a dishonored payment device given in payment under the contract, the holder may charge the obligor under the contract the processing fee authorized by this section, and the fee may be added to the unpaid balance owed under the contract.  Interest may not be charged on the fee during the term of the contract.
(e)  This section does not affect any right or remedy to which the holder of a payment device may be entitled under any rule, written contract, judicial decision, or other statute.
Added by Acts 2001, 77th Leg., ch. 1420, Sec. 2.001(a), eff. Sept. 1, 2001;  Amended by Acts 2003, 78th Leg., ch. 413, Sec. 1, eff. Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 95 (S.B. 1563), Sec. 11, eff. September 1, 2005.
Acts 2011, 82nd Leg., R.S., Ch. 333 (H.B. 2793), Sec. 1, eff. September 1, 2011.
Acts 2019, 86th Leg., R.S., Ch. 1352 (S.B. 346), Sec. 4.01, eff. January 1, 2020.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter E. Dishonor › Section 3.507. Delivery Notification Fee by Holder of Check or Similar Sight Order

Sec. 3.507.  DELIVERY NOTIFICATION FEE BY HOLDER OF CHECK OR SIMILAR SIGHT ORDER.  (a)  On return of a check or similar sight order, as defined by Section 1.07, Penal Code, to the holder following dishonor of the check or sight order by a payor and prior to the check or sight order being referred for prosecution, the holder, the holder's assignee, agent, or representative, or any other person retained by the holder to seek collection of the dishonored check or sight order may charge the drawer or indorser of the check or sight order the cost of delivery notification by registered or certified mail with return receipt requested under Section 31.06 or Section 32.41, Penal Code, as applicable.
(b)  A person may not charge a delivery notification fee to a drawer or indorser under this section if the fee has been collected under Article 102.007(g), Code of Criminal Procedure.  If a delivery notification fee has been collected under this section and the holder subsequently receives a fee collected under Article 102.007(g), Code of Criminal Procedure, the holder shall immediately refund the fee previously collected from the drawer or indorser.
(c)  This section does not affect any right or remedy to which the holder of a check or similar sight order may be entitled under any rule, written contract, judicial decision, or other statute, including Section 3.506.
Added by Acts 2007, 80th Leg., R.S., Ch. 976 (S.B. 548), Sec. 4, eff. September 1, 2007.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 128 (S.B. 821), Sec. 6, eff. September 1, 2013.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter F. Discharge and Payment › Section 3.601. Discharge and Effect of Discharge

Sec. 3.601.  DISCHARGE AND EFFECT OF DISCHARGE.  (a)  The obligation of a party to pay the instrument is discharged as stated in this chapter or by an act or agreement with the party that would discharge an obligation to pay money under a simple contract.
(b)  Discharge of the obligation of a party is not effective against a person acquiring rights of a holder in due course of the instrument without notice of the discharge.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter F. Discharge and Payment › Section 3.603. Tender of Payment

Sec. 3.603.  TENDER OF PAYMENT.  (a)  If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of tender is governed by principles of law applicable to tender of payment under a simple contract.
(b)  If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender, of the obligation of an indorser or accommodation party having a right of recourse with respect to the obligation to which the tender relates.
(c)  If tender of payment of an amount due on an instrument is made to a person entitled to enforce the instrument, the obligation of the obligor to pay interest after the due date on the amount tendered is discharged.  If presentment is required with respect to an instrument and the obligor is able and ready to pay on the due date at every place of payment stated in the instrument, the obligor is deemed to have made tender of payment on the due date to the person entitled to enforce the instrument.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 3 - Negotiable Instruments › Subchapter F. Discharge and Payment › Section 3.604. Discharge by Cancellation or Renunciation

Sec. 3.604.  DISCHARGE BY CANCELLATION OR RENUNCIATION.  (a)  A person entitled to enforce an instrument, with or without consideration, may discharge the obligation of a party to pay the instrument:
(1)  by an intentional voluntary act, such as surrender of the instrument to the party, destruction, mutilation, or cancellation of the instrument, cancellation or striking out of the party's signature, or the addition of words to the instrument indicating discharge; or
(2)  by agreeing not to sue or otherwise renouncing rights against the party by a signed record.
(b)  Cancellation or striking out of an indorsement pursuant to Subsection (a) does not affect the status and rights of a party derived from the indorsement.
(c)  In this section, "signed," with respect to a record that is not a writing, includes the attachment to or logical association with the record of an electronic symbol, sound, or process with the present intent to adopt or accept the record.
Amended by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
Amended by:
Acts 2005, 79th Leg., Ch. 95 (S.B. 1563), Sec. 13, eff. September 1, 2005.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter A. General Provisions and Definitions › Section 4.101. Short Title

Sec. 4.101.  SHORT TITLE.  This chapter may be cited as Uniform Commercial Code--Bank Deposits and Collections.
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 A. General Provisions and Definitions › Section 4.102. Applicability

Sec. 4.102.  APPLICABILITY.  (a)  To the extent that items within this chapter are also within Chapters 3 and 8, they are subject to those chapters.  If there is conflict, this chapter governs Chapter 3, but Chapter 8 governs this chapter.
(b)  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.
(c)  Notwithstanding Section 1.301, the laws of this state govern a deposit contract between a bank and a consumer account holder if the branch or separate office of the bank that accepts the deposit contract is located in this state.  For purposes of this subsection, "consumer account holder" means a natural person who holds a deposit account primarily for personal, family, or household purposes but does not include a natural person who holds an account for another in a professional capacity.
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 1999, 76th Leg., ch. 344, Sec. 5.001, eff. Sept. 1, 1999;  Acts 2003, 78th Leg., ch. 542, Sec. 11, eff. Sept. 1, 2003.
2023 Texas Statutes › Business and Commerce Code › Title 1 - Uniform Commercial Code › Chapter 4 - Bank Deposits and Collections › Subchapter A. General Provisions and Definitions › Section 4.103. Variation by Agreement; Measure of Damages; Action Constituting Ordinary Care

Sec. 4.103.  VARIATION BY AGREEMENT;  MEASURE OF DAMAGES;  ACTION CONSTITUTING ORDINARY CARE.  (a)  The effect of the provisions of this chapter 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.
(b)  Federal Reserve regulations and operating circulars, clearing-house rules, and the like have the effect of agreements under Subsection (a), whether or not specifically assented to by all parties interested in items handled.
(c)  Action or non-action approved by this chapter 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 chapter, is prima facie the exercise of ordinary care.
(d)  The specification or approval of certain procedures by this chapter is not disapproval of other procedures that may be reasonable under the circumstances.
(e)  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.
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 A. General Provisions and Definitions › Section 4.105. "Bank"; "Depositary Bank"; "Intermediary Bank"; "Collecting Bank"; "Payor Bank"; "Presenting Bank"

Sec. 4.105.  "BANK";  "DEPOSITARY BANK";  "INTERMEDIARY BANK";  "COLLECTING BANK";  "PAYOR BANK";  "PRESENTING BANK".  In this chapter:
(1)  "Bank" means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union, or trust company.
(2)  "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.
(3)  "Payor bank" means a bank that is the drawee of a draft.
(4)  "Intermediary bank" means a bank to which an item is transferred in course of collection except the depositary or payor bank.
(5)  "Collecting bank" means a bank handling an item for collection except the payor bank.
(6)  "Presenting bank" means a bank presenting an item except a 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 A. General Provisions and Definitions › Section 4.106. Payable Through or Payable at Bank; Collecting Bank

Sec. 4.106.  PAYABLE THROUGH OR PAYABLE AT BANK;  COLLECTING BANK.  (a)  If an item states that it is "payable through" a bank identified in the item, the item:
(1)  designates the bank as a collecting bank and does not by itself authorize the bank to pay the item;  and
(2)  may be presented for payment only by or through the bank.
(b)  If an item states that it is "payable at" a bank identified in the item, the item is equivalent to a draft drawn on the bank.
(c)  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.
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 A. General Provisions and Definitions › Section 4.107. Separate Office of a Bank

Sec. 4.107.  SEPARATE OFFICE OF A BANK.  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 must be given under this chapter and under Chapter 3.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Renumbered from Sec. 4.106 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 A. General Provisions and Definitions › Section 4.108. Time of Receipt of Items

Sec. 4.108.  TIME OF RECEIPT OF ITEMS.  (a)  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 two P.M. or later as a cutoff hour for the handling of money and items and the making of entries on its books.
(b)  An item or deposit of money received on any day after a cutoff 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Renumbered from Sec. 4.107 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 A. General Provisions and Definitions › Section 4.109. Delays

Sec. 4.109.  DELAYS.  (a)  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 title for a period not exceeding two additional banking days without discharge of drawers or indorsers or liability to its transferor or a prior party.
(b)  Delay by a collecting bank or payor bank beyond time limits prescribed or permitted by this title or by instructions is excused if:
(1)  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
(2)  the bank exercises such diligence as the circumstances require.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.  Renumbered from Sec. 4.108 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 A. General Provisions and Definitions › Section 4.110. Electronic Presentment

Sec. 4.110.  ELECTRONIC PRESENTMENT.  (a)  "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.
(b)  Presentment of an item under an agreement for presentment is made when the presentment notice is received.
(c)  If presentment is made by presentment notice, a reference to "item" or "check" in this chapter means the presentment notice unless the context otherwise indicates.
Added 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 A. General Provisions and Definitions › Section 4.111. Statute of Limitations

Sec. 4.111.  STATUTE OF LIMITATIONS.  An action to enforce an obligation, duty, or right arising under this chapter must be commenced within three years after the cause of action accrues.
Added 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 A. General Provisions and Definitions › Section 4.112. Payment of Check at Par

Sec. 4.112.  PAYMENT OF CHECK AT PAR.  (a)  Except as otherwise provided by Chapter 3 or this chapter, a payor bank shall pay a check drawn on it against an account with a sufficient balance at par without regard to whether the payee holds an account at the bank.
(b)  This section does not prohibit a bank from requiring commercially reasonable verification of the payee's identity before settlement of the check.
(c)  In addition to any remedy provided by law, the banking commissioner, in coordination with the Finance Commission of Texas, shall ensure that payor banks comply with the requirements of this section.
Added by Acts 2001, 77th Leg., ch. 699, Sec. 20, eff. Sept. 1, 2001.