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Can you summarize Chapter 5 ?
Bank Deposits and Collections > Collection Of Documentary Drafts
Short Summary
The provided legal document governs the responsibility of a presenting bank for documents and goods, as well as the report of reasons for dishonor and the role of a referee in case of need. It specifically applies to banks presenting a documentary draft. According to the document, a bank that takes a documentary draft for collection must present or send the draft and accompanying documents for presentment. If the draft has not been paid or accepted in due course, the bank must seasonably notify its customer of such fact, even if it has discounted or bought the draft or extended credit available for withdrawal. When a draft or the relevant instructions require presentment upon arrival or when goods arrive, the collecting bank is not obligated to present until a reasonable time for the arrival of the goods has expired. Refusal to pay or accept due to the goods not arriving is not considered dishonor, but the bank must notify its transferor of such refusal. The bank is not required to present the draft again until instructed to do so or learns of the arrival of the goods. The presenting bank must deliver the documents to the drawee upon acceptance of the draft if it is payable more than three days after presentment, or only on payment if it is payable within three days. In case of dishonor, the presenting bank may seek instructions from any referee in case of need designated in the draft. If not utilizing their services, the bank must diligently and in good faith ascertain the reason for dishonor, notify its transferor, and request instructions. The presenting bank has no obligation regarding the goods represented by the documents, except to follow reasonable instructions. It is entitled to reimbursement for expenses incurred in following instructions and may request prepayment or indemnity for such expenses. If the presenting bank does not receive instructions within a reasonable time following the dishonor of a documentary draft, it may store, sell, or otherwise deal with the goods in any reasonable manner. The presenting bank has a lien upon the goods or their proceeds for its reasonable expenses incurred by action under this provision, which may be foreclosed in the same manner as an unpaid seller’s lien.
Whom does it apply to?
Banks presenting a documentary draft
What does it govern?
Responsibility of a presenting bank for documents and goods, report of reasons for dishonor, role of a referee in case of need
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Guam