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Can you summarize MNST 336.4-214?
UNIFORM COMMERCIAL CODE > RIGHT OF CHARGEBACK OR REFUND; LIABILITY OF COLLECTING BANK; RETURN OF ITEM.
Short Summary
This legal document, governed by the Minnesota Statutes under the Uniform Commercial Code, specifically addresses the right of chargeback or refund, liability of collecting banks, and the return of items. It applies to collecting banks, their customers, and depositary banks. The document outlines the actions a collecting bank can take if it fails to receive settlement for an item, including revoking settlement, charging back the amount credited to the customer’s account, or obtaining a refund. The bank must return the item or notify the customer within a reasonable time to exercise these rights. The document also clarifies that the right to chargeback or obtain a refund terminates once a settlement for the item is finalized. Additionally, it explains the process of returning an item and allows depositary banks that are also payors to charge back the amount of an item. The document emphasizes that the right to chargeback is not affected by previous use of a credit given for the item or failure by any bank to exercise ordinary care. It also states that a failure to chargeback or claim a refund does not impact other rights of the bank against the customer or any other party. Lastly, the document mentions that if credit is given in dollars as the equivalent of the value of an item payable in foreign money, the dollar amount of any chargeback or refund must be calculated based on the bank-offered spot rate for the foreign money prevailing on the day when the person entitled to the chargeback or refund learns that payment will not be received in the ordinary course.
Whom does it apply to?
Collecting banks, customers, depositary banks
What does it govern?
Right of chargeback or refund; liability of collecting bank; return of item
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Minnesota