Can you summarize 42a CTGS Article 4?

Short Summary

This legal document, part of the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically addresses bank deposits and collections. It states that the provisions of this article can be varied by agreement, but a bank’s responsibility for lack of good faith or failure to exercise ordinary care cannot be disclaimed or limited in terms of damages. However, the parties involved can agree on the standards by which the bank’s responsibility is measured, as long as those standards are not manifestly unreasonable. The document also mentions that federal reserve and Bureau of Consumer Financial Protection regulations, operating circulars, and clearinghouse rules have the effect of agreements. It further states that action or nonaction approved by this article or pursuant to federal reserve or Bureau of Consumer Financial Protection regulations is considered the exercise of ordinary care. The document clarifies that the specification or approval of certain procedures does not disapprove of other reasonable procedures. In case of failure to exercise ordinary care, the measure of damages is the amount of the item reduced by an amount that could not have been realized by the exercise of ordinary care, and additional damages may be included if bad faith is involved. This legal document, part of the Uniform Commercial Code - Articles 1 to 10, specifically governs Bank Deposits and Collections. It provides definitions for various terms used in this context, such as ‘account’, ‘afternoon’, ‘banking day’, ‘clearinghouse’, ‘customer’, ‘documentary draft’, ‘draft’, ‘drawee’, and ‘item’. The document also includes definitions from other articles that apply to Bank Deposits and Collections. Additionally, it mentions that article 1 contains general definitions and principles of construction and interpretation applicable throughout this article. Overall, this document establishes the framework and terminology for the handling of bank deposits and collections in the state of Connecticut. This legal document, part of the General Statutes of Connecticut and the Uniform Commercial Code, specifically addresses bank deposits and collections. It provides definitions for various types of banks involved in the process, including depositary banks, payor banks, intermediary banks, collecting banks, and presenting banks. A ‘bank’ is defined as a person engaged in the business of banking, such as savings banks, savings and loan associations, credit unions, or trust companies. A ‘depositary bank’ refers to the first bank to take an item, unless it is presented for immediate payment over the counter. A ‘payor bank’ is the bank that is the drawee of a draft. An ‘intermediary bank’ is a bank to which an item is transferred in the course of collection, excluding the depositary or payor bank. A ‘collecting bank’ is a bank handling an item for collection, excluding the payor bank. And a ‘presenting bank’ is a bank presenting an item, excluding a payor bank. The document does not mention any specific exemptions or penalties. This legal document, found within the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically addresses the topic of Bank Deposits and Collections. It provides guidelines and regulations regarding the payment and collection of items through banks. According to the document, if an item states that it is ‘payable through’ a bank, the bank is designated as a collecting bank and is not authorized to pay the item. The item can only be presented for payment by or through the bank. On the other hand, if an item states that it is ‘payable at’ a bank, it is equivalent to a draft drawn on the bank. Additionally, if a draft names a nonbank drawee and it is unclear whether a bank named in the draft is a codrawee or a collecting bank, the bank is considered a collecting bank. The document provides historical references and amendments to the relevant sections. However, no specific penalties or exemptions are mentioned in this document. 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 notice or orders must be given under this article and under article 3. 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 o’clock p.m. or later as a cutoff hour for the handling of money and items and the making of entries on its books. 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. This legal document, part of the Uniform Commercial Code - Articles 1 to 10, specifically addresses the handling of bank deposits and collections. It provides guidelines for collecting banks in their efforts to secure payment for specific items drawn on a payor other than a bank. The collecting bank has the authority to waive, modify, or extend time limits imposed by this title for up to two additional banking days without discharging drawers or endorsers or incurring liability to its transferor or a prior party. The document also excuses delays by a collecting bank or payor bank beyond the prescribed or permitted time limits if the delay is caused by circumstances beyond the bank’s control, such as interruption of communication or computer facilities, suspension of payments by another bank, war, emergency conditions, failure of equipment, or other uncontrollable factors. The bank is required to exercise diligence as the circumstances require. Overall, this document governs the actions and responsibilities of collecting banks, payor banks, drawers, endorsers, and transferors in relation to bank deposits and collections. Subject to section 42a-3-420 concerning conversion of instruments and section 42a-3-206 concerning restrictive endorsements, 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. This legal document, found within the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically addresses the methods of sending and presenting items in banking transactions. According to the document, a collecting bank must send items by a reasonably prompt method, considering relevant instructions, the nature of the item, the number of items on hand, and the cost of collection involved. The collecting bank has the option to send an item directly to the payor bank, to a nonbank payor if authorized by its transferor, or to a nonbank payor for items other than documentary drafts if authorized by federal reserve regulation or operating circular, clearinghouse rule, or similar provisions. Presentment can be made by a presenting bank at a place requested by the payor bank or other payor. The document does not mention any specific exemptions or penalties. This legal document, part of the General Statutes of Connecticut and the Uniform Commercial Code, specifically addresses the rules and obligations related to depositary banks and the collection of items. According to the document, when a customer delivers an item to a depositary bank for collection, the bank becomes a holder of the item, regardless of whether the customer endorses it. If the bank satisfies the requirements of section 42a-3-302, it is considered a holder in due course. Additionally, the depositary bank provides a warranty to collecting banks, payor banks, and the drawer, guaranteeing that the amount of the item was paid to the customer or deposited into their account. This document replaced previous provisions and clarifies the circumstances under which a depositary bank becomes a holder and the warranty it provides when an item is delivered for collection. Any agreed method that identifies the transferor bank is sufficient for the item’s further transfer to another bank. This legal document, part of the General Statutes of Connecticut and the Uniform Commercial Code, specifically Bank Deposits and Collections, governs transfer warranties in the context of item transfers and settlements. It outlines the warranties that a customer or collecting bank makes when transferring an item, including the authenticity and authorization of signatures, the absence of alterations, the absence of defenses or claims in recoupment, and knowledge of insolvency proceedings. The document also establishes the obligations of a transferor in case of dishonor and prohibits the disclaimer of such obligations. It further addresses the rights of a person who took the item in good faith and suffered a breach of warranty, the time limit for giving notice of a claim for breach of warranty, and the accrual of a cause of action for breach of warranty. The document does not apply to checks and does not specify any specific penalties for non-compliance or violation of its provisions. This provision, found in the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically Bank Deposits and Collections, addresses encoding and retention warranties. It establishes that a person who encodes information on or with respect to an item after issue warrants the correctness of the information to subsequent collecting banks, payor banks, and other payors. The same warranty is made by a depositary bank if the customer encodes the information. Additionally, a person who undertakes to retain an item pursuant to an agreement for electronic presentment warrants that the retention and presentment of the item comply with the agreement. The depositary bank also makes this warranty if the customer undertakes to retain the item. If a person takes the item in good faith and warranties are breached, they may recover damages equal to the loss suffered, as well as expenses and loss of interest incurred as a result of the breach. This legal document governs the security interest of a collecting bank in items, accompanying documents, and proceeds. It applies specifically to collecting banks. The document outlines the circumstances in which a collecting bank has a security interest in an item, such as when credit has been withdrawn or applied for a deposited item, when credit has been given for an item available for withdrawal, or when an advance has been made on the item. The security interest remains on all items if credit given for several items received at one time or pursuant to a single agreement is withdrawn or applied in part. The document also states that receipt of a final settlement for an item is a realization on the collecting bank’s security interest. The security interest is enforceable without a security agreement, does not require filing for perfection, and has priority over conflicting perfected security interests. No penalties are mentioned in the document. 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 42a-3-302 on what constitutes a holder in due course. This legal document governs the process of presentment by notice of an item that is not payable by, through, or at a bank, as well as the liability of the drawer or endorser. It states that a collecting bank may present such an item by sending a written notice to the party responsible for accepting or paying the item. The notice must be sent in a timely manner and the bank must meet any requirements specified by the party under section 42a-3-501. If the payment, acceptance, or compliance with a requirement is not received by the specified time, the presenting bank may treat the item as dishonored and charge any drawer or endorser by sending them notice of the facts. This document does not mention any specific exemptions or penalties. This legal document governs the medium and time of settlement by a bank. It applies to banks and persons involved in settlement transactions. The document states that the medium and time of settlement may be prescribed by Federal Reserve regulations, circulars, clearinghouse rules, or agreements. In the absence of such prescription, the medium of settlement is cash or credit to an account in a Federal Reserve bank or specified by the person receiving settlement. The time of settlement varies depending on the method of tender, such as cash, credit in a Federal Reserve bank account, credit or debit to a bank account, or funds transfer. If the tender of settlement is not by an authorized medium or the time of settlement is not fixed, settlement occurs only when the tender of settlement is accepted by the person receiving settlement. The document also provides provisions for settlement by cashier’s check, teller’s check, and authority to charge an account. No specific exemptions or penalties are mentioned in this document. This legal document, found within the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically addresses the final payment of items by a payor bank, the process by which provisional debits and credits become final, and the availability of credits for withdrawal. According to the document, an item is considered finally paid by a payor bank when it is paid in cash, settled without the right to revoke the settlement, or provisionally settled and not revoked within the permitted time. If provisional settlement does not become final, the item is not considered finally paid. Provisional debits or credits for an item become final upon final payment by the payor bank if settlement is made through a clearinghouse or by debits or credits in accounts between the presenting and payor banks. If a collecting bank receives a settlement for an item that becomes final, it is accountable to its customer for the amount of the item, and any provisional credit given becomes final. The document also outlines the conditions under which credits become available for withdrawal, including the time for availability of funds and the bank’s right to apply the credit to an obligation of the customer. Additionally, it specifies the availability of funds for deposits of money. No specific exemptions or penalties are mentioned in this document. This legal document, found in the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically addresses the responsibilities of a payor bank for the late return of an item. According to the document, if a payor bank receives an item and retains it beyond midnight of the banking day of receipt without settling for it, or fails to pay, return, or send notice of dishonor until after its midnight deadline, the bank is accountable for the amount of the item. The payor bank is also liable for any other properly payable item unless it accepts, pays, or returns the item and accompanying documents within the allowed time. The liability of the payor bank is subject to defenses based on breach of a presentment warranty or proof of fraudulent intent by the person seeking enforcement. The document does not mention any specific penalties for non-compliance or violation. This legal document, found within the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically in the section on Bank Deposits and Collections, addresses the timing and order of actions related to items subject to notice, stop-payment order, legal process, or set-off. It states that if a payor bank receives knowledge, notice, stop-payment order, or legal process, or exercises set-off after certain events have occurred, such as accepting or certifying the item, paying the item in cash, settling for the item, becoming accountable for the amount of the item, or reaching a cutoff hour for checks, it cannot terminate, suspend, or modify its right or duty to pay the item or charge its customer’s account. The document also mentions that items may be accepted, paid, certified, or charged to the customer’s account in any order. No specific exemptions or penalties are mentioned in this document. This legal document, found in the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically in the section related to Bank Deposits and Collections, governs the charging of a customer’s account by a bank. According to the document, a bank may charge against the customer’s account for items that are properly payable, even if it creates an overdraft. The item must be authorized by the customer and in accordance with any agreement between the customer and the bank. However, the customer is not liable for the amount of an overdraft if they neither signed the item nor benefited from its proceeds. The document also addresses the payment of postdated checks, stating that a bank may charge against the customer’s account for a check that is otherwise properly payable, unless the customer has given notice of postdating. If a bank charges against the account before the date stated in the notice, the bank is liable for damages. Additionally, the document discusses the bank’s ability to charge the customer’s account based on the original terms of an altered item or the terms of a completed item, as long as the bank is not aware of any improper completion. Overall, this document provides guidelines for when a bank may charge a customer’s account and the liabilities associated with such actions. This legal document pertains to the liability of payor banks to their customers for wrongful dishonor of an item. It states that a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, unless the bank has agreed to pay the overdraft. The payor bank is liable to its customer for damages caused by the wrongful dishonor, including actual damages and consequential damages. The determination of the customer’s account balance, on which the decision to dishonor for insufficiency of available funds is based, can be made at any time between the receipt of the item by the payor bank and the return of the item or giving notice in lieu of return. If the payor bank elects to make a subsequent balance determination to reevaluate the decision to dishonor, the account balance at that time determines whether the dishonor for insufficiency of available funds is wrongful. This legal document, found in the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically in the section on Bank Deposits and Collections, addresses the customer’s right to stop payment and the burden of proof of loss. According to the document, a customer or any person authorized to draw on the account can stop payment of any item drawn on the customer’s account or close the account by providing an order to the bank. The stop-payment order is effective for six months and can be renewed for additional six-month periods. However, 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 falls on the customer. The loss from payment of an item contrary to a stop-payment order may include damages for dishonor of subsequent items. The document does not mention any specific penalties for non-compliance or violation of its provisions. A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which 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. This legal provision, found in the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically in the section related to Bank Deposits and Collections, addresses the authority of a payor or collecting bank in the event of the death or incompetence of a customer. According to this provision, the authority of a bank to accept, pay, collect, or account for an item or its proceeds is not affected by the incompetence of a customer, as long as the bank is unaware of any adjudication of incompetence. Similarly, the authority of the bank is not revoked by the death of a customer until the bank becomes aware of the death or an adjudication of incompetence and has a reasonable opportunity to act on it. The provision also allows a bank to continue paying or certifying checks drawn before the customer’s death for a period of ten days, unless ordered to stop payment by a person claiming an interest in the account. Overall, this provision clarifies the rights and responsibilities of payor and collecting banks in situations involving the death or incompetence of a customer. This legal document, part of the General Statutes of Connecticut and the Uniform Commercial Code, specifically Bank Deposits and Collections, outlines the duty of customers to discover and report unauthorized signatures or alterations. According to the document, banks are required to provide customers with statements of account that sufficiently identify the items paid. If the items are not returned, the bank must retain them or provide legible copies. Customers are expected to promptly examine the statements or items and notify the bank if any unauthorized payments are discovered. Failure to comply with this duty may preclude the customer from asserting unauthorized signatures or alterations against the bank. However, if the bank fails to exercise ordinary care or does not pay the item in good faith, the preclusion may not apply. Additionally, if the customer does not discover and report unauthorized signatures or alterations within one year, they may be precluded from asserting such claims against the bank. The document also mentions the possibility of reducing the one-year time frame through an agreement between the bank and the customer. Overall, this document establishes the responsibilities and potential consequences for customers and banks regarding unauthorized signatures or alterations. 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. This legal document, found within the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically addresses the process of presenting a documentary draft. It states that unless otherwise instructed and except as provided in article 5, a bank presenting a documentary draft 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. In case of dishonor, the presenting bank may seek and follow instructions from any referee in case of need designated in the draft. If the bank chooses not to utilize the referee’s services, it must use diligence and good faith to ascertain the reason for dishonor, notify its transferor of the dishonor and the results of its effort to ascertain the reasons, and request instructions. The presenting bank is not obligated with respect to goods represented by the documents, except to follow any reasonable instructions seasonably received. It has the right to reimbursement for any expenses incurred in following instructions and to prepayment of or indemnity for those expenses. 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. 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.

Whom does it apply to?

Banks, depositary banks, payor banks, intermediary banks, collecting banks, presenting banks, customers

What does it govern?

Bank Deposits and Collections

What are exemptions?

No specific exemptions are mentioned.

What are the Penalties?

No specific penalties are mentioned.

Jurisdiction

Connecticut

Source

42a CTGS Article 4 [https://reggi.cloud.regology.com/regulations/US-CTGS/US-CTGS_T_42a_C_4]

• Banking