Okla. Stat. tit. 12A § 4-202

Current through Laws 2024, c. 453.

Section 4-202 - Responsibility for Collection or Return; When Action Timely

(a) A collecting bank must exercise ordinary care in:

(1) Presenting an item or sending it for presentment;

(2) Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank's transferor after learning that the item has not been paid or accepted, as the case may be;

(3) Settling for an item when the bank receives final settlement; and

(4) Notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.

(b) A collecting bank exercises ordinary care under subsection (a) of this section by taking proper action before its midnight deadline following receipt of an item, notice, or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.

(c) Subject to paragraph (1) of subsection (a) of this section, a bank is not liable for the insolvency, neglect, misconduct, mistake or default of another bank or person or for loss or destruction of an item in the possession of others or in transit.

Okla. Stat. tit. 12A, § 4-202

Laws 1961, p. 123, § 4-202; Amended by Laws 1991, SB 25, c. 117, § 106, eff. 1/1/1992.

Oklahoma Code Comment

Prior Statutory Provisions:

6 O.S. §§ 118d, 118e.

Text and derivation of prior provisions, see Appendix at end of this title.

Comment:

(1) Former 6 O.S. § 118d (which was section 5 of the ABA Bank Collection Code) required a bank to exercise due care in the collection of an item, but it did not state the particular acts in which due care was required as set out in the Commercial Code. The Oklahoma cases have required a collecting bank to forward the item within a reasonable time, Bennett v. American Nat. Bank of Enid, 130 Okl. 23, 264 P. 912; Bank of Commerce v. Ingram, 33 Okl. 46, 124 P. 64 (1912).

(2) Former 6 O.S. § 118e (which was section 6 of the ABA Bank Collection Code) allowed the bank until the next business day to forward items. This section was enacted in 1937, and in 1949 former 6 O.S. § 119.1 was added, giving drawee banks until midnight the day following receipt in which to honor or reject items. However, the portions of the earlier statute were not amended to make the time uniform. The Commercial Code applies the "midnight dead line" (see definition at 12 O.S. §4-104(h)) to all collection functions.

(3) Previous Oklahoma law is in accord. Former 6 O.S. § 118d.