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Can you summarize Tex. Bus. & Com. Section 4.303?
COLLECTION OF ITEMS: PAYOR BANKS > WHEN ITEMS SUBJECT TO NOTICE, STOP-PAYMENT ORDER, LEGAL PROCESS, OR SETOFF; ORDER IN WHICH ITEMS MAY BE CHARGED OR CERTIFIED.
Short Summary
This provision, found in the Texas Statutes under the Business and Commerce Code, specifically in the Uniform Commercial Code section on Bank Deposits and Collections, pertains to the collection of items by payor banks. It states that any knowledge, notice, stop-payment order, or legal process received by the payor bank comes too late to terminate, suspend, or modify the bank’s right or duty to pay an item or charge its customer’s account if certain conditions are met. These conditions include the bank accepting or certifying the item, paying the item in cash, settling for the item without the right to revoke the settlement, becoming accountable for the amount of the item under Section 4.302, or reaching a cutoff hour for checks. The provision also allows items to be accepted, paid, certified, or charged to the customer’s account in any order and before or after the bank’s regular banking hours. The bank is not obligated to determine the time of day an item is received and may withhold the amount pending a determination of the effect, consequence, or priority of any knowledge, notice, stop-payment order, or legal process. Overall, this provision establishes the order and timing in which items may be charged or certified by payor banks.
Whom does it apply to?
Payor banks
What does it govern?
Order in which items may be charged or certified
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Texas