California

Commercial Code

669 sections, each with the official text and a plain-English explanation of what it means for you.

• § 2313 — (1) Express warranties by the seller are created as follows: (a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the barg
• § 2314 — (1) Unless excluded or modified (Section 2316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.
• § 2315 — Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furn
• § 2316 — (1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but
• § 2317 — Warranties whether express or implied shall be construed as consistent with each other and as cumulative, but if such construction is unreasonable the intention of the parties shall determine which wa
• § 2319 — (1) Unless otherwise agreed the term F.
• § 2320 — (1) The term C.
• § 2321 — Under a contract containing a term C.
• § 2322 — (1) Unless otherwise agreed a term for delivery of goods “ex-ship” (which means from the carrying vessel) or in equivalent language is not restricted to a particular ship and requires delivery from a
• § 2323 — (1) Where the contract contemplates overseas shipment and contains a term C.
• § 2324 — Under a term “no arrival, no sale” or terms of like meaning, unless otherwise agreed, (a) The seller must properly ship conforming goods and if they arrive by any means he must tender them on arrival
• § 2325 — (1) Failure of the buyer seasonably to furnish an agreed letter of credit is a breach of the contract for sale.
• § 2326 — (1) Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is (a) A “sale on approval” if the goods are delivered primarily
• § 2327 — (1) Under sale on approval unless otherwise agreed (a) Although the goods are identified to the contract the risk of loss and the title do not pass to the buyer until acceptance; and (b) Use of the go
• § 2328 — (1) In a sale by auction if goods are put up in lots each lot is the subject of a separate sale.
• § 2401 — Each provision of this division with regard to the rights, obligations and remedies of the seller, the buyer, purchasers or other third parties applies irrespective of title to the goods except where
• § 2402 — (1) Except as provided in subdivisions (2) and (3), rights of unsecured creditors of the seller with respect to goods which have been identified to a contract for sale are subject to the buyer’s right
• § 2403 — (1) A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased
• § 2501 — (1) The buyer obtains a special property and an insurable interest in goods by identification of existing goods as goods to which the contract refers even though the goods so identified are nonconform
• § 2502 — (1) Subject to subdivisions (2) and (3), and even though the goods have not been shipped, a buyer who has paid a part or all of the price of goods in which he or she has a special property under the p
• § 2503 — (1) Tender of delivery requires that the seller put and hold conforming goods at the buyer’s disposition and give the buyer any notification reasonably necessary to enable him to take delivery.
• § 2504 — Where the seller is required or authorized to send the goods to the buyer and the contract does not require him to deliver them at a particular destination, then unless otherwise agreed he must (a) Pu
• § 2505 — (1) Where the seller has identified goods to the contract by or before shipment: (a) His procurement of a negotiable bill of lading to his own order or otherwise reserves in him a security interest in
• § 2506 — (1) A financing agency by paying or purchasing for value a draft which relates to a shipment of goods acquires to the extent of the payment or purchase and in addition to its own rights under the draf
• § 2507 — (1) Tender of delivery is a condition to the buyer’s duty to accept the goods and, unless otherwise agreed, to his duty to pay for them.
• § 2508 — (1) Where any tender or delivery by the seller is rejected because nonconforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure a
• § 2509 — (1) Where the contract requires or authorizes the seller to ship the goods by carrier (a) If it does not require him to deliver them at a particular destination, the risk of loss passes to the buyer w
• § 2510 — (1) Where a tender or delivery of goods so fails to conform to the contract as to give a right of rejection the risk of their loss remains on the seller until cure or acceptance.
• § 2511 — (1) Unless otherwise agreed, tender of payment is a condition to the seller’s duty to tender and complete any delivery.
• § 2512 — (1) Where the contract requires payment before inspection nonconformity of the goods does not excuse the buyer from so making payment unless (a) the nonconformity appears without inspection or (b) des
• § 2513 — (1) Unless otherwise agreed and subject to subdivision (3), where goods are tendered or delivered or identified to the contract for sale, the buyer has a right before payment or acceptance to inspect
• § 2514 — Unless otherwise agreed documents against which a draft is drawn are to be delivered to the drawee on acceptance of the draft if it is payable more than three days after presentment; otherwise, only o
• § 2515 — In furtherance of the adjustment of any claim or dispute (a) Either party on reasonable notification to the other and for the purpose of ascertaining the facts and preserving evidence has the right to
• § 2601 — Subject to the provisions of this division on breach in installment contracts (Section 2612) and unless otherwise agreed under the sections on contractual limitations of remedy (Sections 2718 and 2719
• § 2602 — (1) Rejection of goods must be within a reasonable time after their delivery or tender.
• § 2603 — (1) Subject to any security interest in the buyer (subdivision (3) of Section 2711), when the seller has no agent or place of business at the market of rejection a merchant buyer is under a duty after
• § 2604 — Subject to the provisions of the immediately preceding section on perishables if the seller gives no instructions within a reasonable time after notification of rejection the buyer may store the rejec
• § 2605 — (1) The buyer’s failure to state in connection with rejection a particular defect which is ascertainable by reasonable inspection precludes him from relying on the unstated defect to justify rejection
• § 2606 — (1) Acceptance of goods occurs when the buyer (a) After a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite
• § 2607 — (1) The buyer must pay at the contract rate for any goods accepted.
• § 2608 — (1) The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it (a) On the reasonable assumption that its nonconfor
• § 2609 — (1) A contract for sale imposes an obligation on each party that the other’s expectation of receiving due performance will not be impaired.
• § 2610 — When either party repudiates the contract with respect to a performance not yet due the loss of which will substantially impair the value of the contract to the other, the aggrieved party may (a) For
• § 2611 — (1) Until the repudiating party’s next performance is due he can retract his repudiation unless the aggrieved party has since the repudiation canceled or materially changed his position or otherwise i
• § 2612 — (1) An “installment contract” is one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contract contains a clause “each delivery is a separ
• § 2613 — Where the contract requires for its performance goods identified when the contract is made, and the goods suffer casualty without fault of either party before the risk of loss passes to the buyer, or
• § 2614 — (1) Where without fault of either party the agreed berthing, loading, or unloading facilities fail or an agreed type of carrier becomes unavailable or the agreed manner of delivery otherwise becomes c
• § 2615 — Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance: (a) Delay in delivery or nondelivery in whole or in part by a seller wh
• § 2616 — (1) Where the buyer receives notification of a material or indefinite delay or an allocation justified under the preceding section he may by written notification to the seller as to any delivery conce
• § 2701 — Remedies for breach of any obligation or promise collateral or ancillary to a contract for sale are not impaired by the provisions of this division.
• § 2702 — (1) Where the seller discovers the buyer to be insolvent he may refuse delivery except for cash including payment for all goods theretofore delivered under the contract, and stop delivery under this d
• § 2703 — Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or before delivery or repudiates with respect to a part or the whole, then with respect to any goods
• § 2704 — (1) An aggrieved seller under the preceding section may (a) Identify to the contract conforming goods not already identified if at the time he learned of the breach they are in his possession or contr
• § 2705 — (1) The seller may stop delivery of goods in the possession of a carrier or other bailee when he discovers the buyer to be insolvent (Section 2702) and may stop delivery of carload, truckload, planelo
• § 2706 — (1) Under the conditions stated in Section 2703 on seller’s remedies, the seller may resell the goods concerned or the undelivered balance thereof.
• § 2707 — (1) A “person in the position of a seller” includes as against a principal an agent who has paid or become responsible for the price of goods on behalf of his principal or anyone who otherwise holds a
• § 2708 — (1) Subject to subdivision (2) and to the provisions of this division with respect to proof of market price (Section 2723), the measure of damages for nonacceptance or repudiation by the buyer is the
• § 2709 — (1) When the buyer fails to pay the price as it becomes due the seller may recover, together with any incidental damages under the next section, the price (a) Of goods accepted or of conforming goods
• § 2710 — Incidental damages to an aggrieved seller include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the
• § 2711 — (1) Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any goods involved, and with respect to the whole if th
• § 2712 — (1) After a breach within the preceding section the buyer may “cover” by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution fo
• § 2713 — (1) Subject to the provisions of this division with respect to proof of market price (Section 2723), the measure of damages for nondelivery or repudiation by the seller is the difference between the m
• § 2714 — (1) Where the buyer has accepted goods and given notification (subdivision (3) of Section 2607) he or she may recover, as damages for any nonconformity of tender, the loss resulting in the ordinary co
• § 2715 — (1) Incidental damages resulting from the seller’s breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commerciall
• § 2716 — (1) Specific performance may be decreed where the goods are unique or in other proper circumstances.
• § 2717 — The buyer on notifying the seller of his intention to do so may deduct all or any part of the damages resulting from any breach of the contract from any part of the price still due under the same cont
• § 2718 — (1) Damages for breach by either party may be liquidated in the agreement subject to and in compliance with Section 1671 of the Civil Code.
• § 2719 — (1) Subject to the provisions of subdivisions (2) and (3) of this section and of the preceding section on liquidation and limitation of damages, (a) The agreement may provide for remedies in addition
• § 2720 — Unless the contrary intention clearly appears, expressions of “cancellation” or “rescission” of the contract or the like shall not be construed as a renunciation or discharge of any claim in damages f
• § 2721 — Remedies for material misrepresentation or fraud include all remedies available under this division for nonfraudulent breach.
• § 2722 — Where a third party so deals with goods which have been identified to a contract for sale as to cause actionable injury to a party to that contract (a) A right of action against the third party is in
• § 2723 — (1) If an action based on anticipatory repudiation comes to trial before the time for performance with respect to some or all of the goods, any damages based on market price (Section 2708 or Section 2
• § 2724 — Whenever the prevailing price or value of any goods regularly bought and sold in any established commodity market is in issue, reports in official publications or trade journals or in newspapers or pe
• § 2725 — (1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.
• § 2800 — As used in this chapter “goods” means goods used or bought for use primarily for personal, family or household purposes.
• § 2801 — In any retail sale of goods, if the manufacturer or seller of the goods issues a written warranty or guarantee as to the condition or quality of all or part of the goods which requires the buyer to co
• § 3101 — This division may be cited as Uniform Commercial Code—Negotiable Instruments.
• § 3102 — (a) This division applies to negotiable instruments.
• § 3103 — (a) In this division: (1) “Acceptor” means a drawee who has accepted a draft.
• § 3104 — (a) Except as provided in subdivisions (c) and (d), “negotiable instrument” means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described
• § 3105 — (a) “Issue” means: (1) the first delivery of an instrument by the maker or drawer, whether to a holder or nonholder, for the purpose of giving rights on the instrument to any person; or (2) if agreed
• § 3106 — (a) Except as provided in this section, for the purposes of subdivision (a) of Section 3104, a promise or order is unconditional unless it states (1) an express condition to payment, (2) that the prom
• § 3107 — Unless the instrument otherwise provides, an instrument that states the amount payable in foreign money may be paid in the foreign money or in an equivalent amount in dollars calculated by using the c
• § 3108 — (a) A promise or order is “payable on demand” if it (1) states that it is payable on demand or at sight, or otherwise indicates that it is payable at the will of the holder, or (2) does not state any
• § 3109 — (a) A promise or order is payable to bearer if it is any of the following: (1) States that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the
• § 3110 — (a) The person to whom an instrument is initially payable is determined by the intent of the person, whether or not authorized, signing as, or in the name or behalf of, the issuer of the instrument.
• § 3111 — Except as otherwise provided for items in Division 4 (commencing with Section 4101), an instrument is payable at the place of payment stated in the instrument.
• § 3112 — (a) Unless otherwise provided in the instrument, (1) an instrument is not payable with interest, and (2) interest on an interest-bearing instrument is payable from the date of the instrument.
• § 3113 — (a) An instrument may be antedated or postdated.
• § 3114 — If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers.
• § 3115 — (a) ‛Incomplete instrument‛ means a signed writing, whether or not issued by the signer, the contents of which show at the time of signing that it is incomplete but that the signer intended it to be c
• § 3116 — (a) Except as otherwise provided in the instrument, two or more persons who have the same liability on an instrument as makers, drawers, acceptors, indorsers who indorse as joint payees, or anomalous
• § 3117 — Subject to applicable law regarding exclusion of proof of contemporaneous or previous agreements, the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nul
• § 3118 — (a) Except as provided in subdivision (e), an action to enforce the obligation of a party to pay a note payable at a definite time shall be commenced within six years after the due date or dates state
• § 3119 — In an action for breach of an obligation for which a third person is answerable over pursuant to this division or Division 4 (commencing with Section 4101), the defendant may give the third person wri
• § 3201 — (a) “Negotiation” means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.
• § 3202 — (a) Negotiation is effective even if obtained (1) from an infant, a corporation exceeding its powers, or a person without capacity, (2) by fraud, duress, or mistake, or (3) in breach of duty or as par
• § 3203 — (a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.
• § 3204 — (a) “Indorsement” means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of (1) negotiating the
• § 3205 — (a) If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement identifies a person to whom it makes the instrument paya
• § 3206 — (a) An indorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent further transfer or negotiation of the
• § 3207 — Reacquisition of an instrument occurs if it is transferred to a former holder, by negotiation or otherwise.
• § 3301 — “Person entitled to enforce” an instrument means (a) the holder of the instrument, (b) a nonholder in possession of the instrument who has the rights of a holder, or (c) a person not in possession of
• § 3302 — (a) Subject to subdivision (c) and subdivision (d) of Section 3106, “holder in due course” means the holder of an instrument if both of the following apply: (1) The instrument when issued or negotiate
• § 3303 — (a) An instrument is issued or transferred for value if any of the following apply: (1) The instrument is issued or transferred for a promise of performance, to the extent the promise has been perform
• § 3304 — (a) An instrument payable on demand becomes overdue at the earliest of the following times: (1) On the day after the day demand for payment is duly made.
• § 3305 — (a) Except as stated in subdivision (b), the right to enforce the obligation of a party to pay an instrument is subject to all of the following: (1) A defense of the obligor based on (A) infancy of th
• § 3306 — A person taking an instrument, other than a person having rights of a holder in due course, is subject to a claim of a property or possessory right in the instrument or its proceeds, including a claim
• § 3307 — (a) In this section: (1) “Fiduciary” means an agent, trustee, partner, corporate officer or director, limited liability company manager, or other representative owing a fiduciary duty with respect to
• § 3308 — (a) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings.
• § 3309 — (a) A person not in possession of an instrument is entitled to enforce the instrument if (1) the person was in possession of the instrument and entitled to enforce it when loss of possession occurred,
• § 3310 — (a) Unless otherwise agreed, if a certified check, cashier’s check, or teller’s check is taken for an obligation, the obligation is discharged to the same extent discharge would result if an amount of
• § 3311 — (a) If a person against whom a claim is asserted proves that (1) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (2) the amount of the claim was unl
• § 3312 — (a) In this section: (1) “Check” means a cashier’s check, teller’s check, or certified check.
• § 3401 — A person is not liable on an instrument unless (a) the person signed the instrument, or (b) the person is represented by an agent or representative who signed the instrument and the signature is bindi
• § 3402 — (a) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by
• § 3403 — (a) Unless otherwise provided in this division or Division 4 (commencing with Section 4101), an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor of a p
• § 3404 — (a) If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or to a person acting in concert with the impostor, by impersonating
• § 3405 — (a) In this section: (1) “Employee” includes an independent contractor and employee of an independent contractor retained by the employer.
• § 3406 — (a) A person whose failure to exercise ordinary care contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or
• § 3407 — (a) “Alteration” means (1) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (2) an unauthorized addition of words or numbers or other change
• § 3408 — A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accept
• § 3409 — (a) “Acceptance” means the drawee’s signed agreement to pay a draft as presented.
• § 3410 — (a) If the terms of a drawee’s acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat the draft as dishonored.
• § 3411 — (a) In this section, “obligated bank” means the acceptor of a certified check or the issuer of a cashier’s check or teller’s check bought from the issuer.
• § 3412 — The issuer of a note or cashier’s check or other draft drawn on the drawer is obliged to pay the instrument (a) according to its terms at the time it was issued or, if not issued, at the time it first
• § 3413 — (a) The acceptor of a draft is obliged to pay the draft (1) according to its terms at the time it was accepted, even though the acceptance states that the draft is payable “as originally drawn” or equ
• § 3414 — (a) This section does not apply to cashier’s checks or other drafts drawn on the drawer.
• § 3415 — (a) Subject to subdivisions (b), (c), and (d) and to subdivision (d) of Section 3419, if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument (1) according to th
• § 3416 — (a) A person who transfers an instrument for consideration warrants all of the following to the transferee and, if the transfer is by indorsement, to any subsequent transferee: (1) The warrantor is a
• § 3417 — (a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, an
• § 3418 — (a) Except as provided in subdivision (c), if the drawee of a draft pays or accepts the draft and the drawee acted on the mistaken belief that (1) payment of the draft had not been stopped pursuant to
• § 3419 — (a) If an instrument is issued for value given for the benefit of a party to the instrument (“accommodated party”) and another party to the instrument (“accommodation party”) signs the instrument for
• § 3420 — (a) The law applicable to conversion of personal property applies to instruments.
• § 3501 — (a) “Presentment” means a demand made by or on behalf of a person entitled to enforce an instrument (1) to pay the instrument made to the drawee or a party obliged to pay the instrument or, in the cas
• § 3502 — (a) Dishonor of a note is governed by the following rules: (1) If the note is payable on demand, the note is dishonored if presentment is duly made to the maker and the note is not paid on the day of
• § 3503 — (a) The obligation of an indorser stated in subdivision (a) of Section 3415 and the obligation of a drawer stated in subdivision (d) of Section 3414 may not be enforced unless (1) the indorser or draw
• § 3504 — (a) Presentment for payment or acceptance of an instrument is excused if (1) the person entitled to present the instrument cannot with reasonable diligence make presentment, (2) the maker or acceptor
• § 3505 — (a) The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated: (1) A document regular in form as provided in subdivision (b) which purports to
• § 3601 — (a) The obligation of a party to pay the instrument is discharged as stated in this division or by an act or agreement with the party which would discharge an obligation to pay money under a simple co
• § 3602 — (a) Subject to subdivision (b), an instrument is paid to the extent payment is made (1) by or on behalf of a party obliged to pay the instrument, and (2) to a person entitled to enforce the instrument
• § 3603 — (a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of tender is governed by principles of law applicable to tender of pay
• § 3604 — (a) A person entitled to enforce an instrument, with or without consideration, may discharge the obligation of a party to pay the instrument (1) by an intentional voluntary act, such as surrender of t
• § 3605 — (a) In this section, the term “indorser” includes a drawer having the obligation described in subdivision (d) of Section 3414.
• § 4101 — This division may be cited as Uniform Commercial Code—Bank Deposits and Collections.
• § 4102 — (a) To the extent that items within this division are also within Divisions 3 (commencing with Section 3101) and 8 (commencing with Section 8101), they are subject to those divisions.
• § 4103 — (a) The effect of the provisions of this division may be varied by agreement, but the parties to the agreement cannot disclaim a bank’s responsibility for its lack of good faith or failure to exercise
• § 4104 — (a) In this division unless the context otherwise requires: (1) “Account” means any deposit or credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, ot
• § 4105 — In this division: (1) “Bank” means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union, or trust company.
• § 4106 — (a) If an item states that it is “payable through” a bank identified in the item, (1) the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item, and (
• § 4107 — 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 shall be gi
• § 4108 — (a) 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 2 p.
• § 4109 — (a) Unless otherwise instructed, a collecting bank in a good faith effort to secure payment of a specific item drawn on a payor other than a bank, and with or without the approval of any person involv
• § 4110 — (a) “Agreement for electronic presentment” means an agreement, clearing house rule, or Federal Reserve regulation or operating circular, providing that presentment of an item may be made by transmissi
• § 4111 — An action to enforce an obligation, duty, or right arising under this division shall be commenced within three years after the cause of action accrues.
• § 4201 — (a) Unless a contrary intent clearly appears and before the time that a settlement given by a collecting bank for an item is or becomes final, the bank, with respect to the item, is an agent or subage
• § 4202 — (a) A collecting bank shall exercise ordinary care in all of the following: (1) Presenting an item or sending it for presentment.
• § 4203 — Subject to Division 3 (commencing with Section 3101) concerning conversion of instruments (Section 3420) and restrictive indorsements (Section 3206), only a collecting bank’s transferor can give instr
• § 4204 — (a) A collecting bank shall send items by reasonably prompt method, taking into consideration relevant instructions, the nature of the item, the number of those items on hand, the cost of collection i
• § 4205 — If a customer delivers an item to a depositary bank for collection both of the following apply: (a) The depositary bank becomes a holder of the item at the time it receives the item for collection if
• § 4206 — Any agreed method that identifies the transferor bank is sufficient for the item’s further transfer to another bank.
• § 4207 — (a) A customer or collecting bank that transfers an item and receives a settlement or other consideration warrants to the transferee and to any subsequent collecting bank that all of the following are
• § 4208 — (a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, an
• § 4209 — (a) A person who encodes information on or with respect to an item after issue warrants to any subsequent collecting bank and to the payor bank or other payor that the information is correctly encoded
• § 4210 — (a) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of either: (1) In case of an item deposited in an account to the extent to which credit given fo
• § 4211 — 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 Se
• § 4212 — (a) Unless otherwise instructed, a collecting bank may present an item not payable by, through, or at a bank by sending to the party to accept or pay a written notice that the bank holds the item for
• § 4213 — (a) With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearing house rules, and the like, or agreement.
• § 4214 — (a) If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive settlement for the ite
• § 4215 — (a) An item is finally paid by a payor bank when the bank has first done any of the following: (1) Paid the item in cash.
• § 4216 — (a) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item shall be returned by the receiver, trustee, or ag
• § 4301 — (a) If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter before midnight of the banking day of receipt, the payor ba
• § 4302 — (a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of either: (1) A demand item, other than a documentary draft, whether properly payable or not, if th
• § 4303 — (a) Any knowledge, notice, or stop-payment order received by, legal process served upon, or setoff exercised by a payor bank comes too late to terminate, suspend, or modify the bank’s right or duty to
• § 4401 — (a) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft.
• § 4402 — (a) Except as otherwise provided in this division, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an over
• § 4403 — (a) A customer or any person authorized to draw on the account if there is more than one person may stop payment of any item drawn on the customer’s account or close the account by an order to the ban
• § 4404 — 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 custom
• § 4405 — (a) A payor or collecting bank’s authority to accept, pay, or collect an item or to account for proceeds of its collection, if otherwise effective, is not rendered ineffective by incompetence of a cus
• § 4406 — (a) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or provide i
• § 4407 — 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
• § 4501 — A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and, upon learning that the draft has not been paid or accepted in due c
• § 4502 — If a draft or the relevant instructions require presentment “on arrival,” “when goods arrive” or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of t
• § 4503 — Unless otherwise instructed and except as provided in Division 5 (commencing with Section 5101), a bank presenting a documentary draft: (a) Shall deliver the documents to the drawee on acceptance of t
• § 4504 — (a) 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 w
• § 5101 — This division may be cited as Uniform Commercial Code—Letters of Credit.
• § 5102 — (a) In this division: (1) “Adviser” means a person who, at the request of the issuer, a confirmer, or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of c
• § 5103 — (a) This division applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit.
• § 5104 — A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued in any form that is a signed record.
• § 5105 — Consideration is not required to issue, amend, transfer, or cancel a letter of credit, advice, or confirmation.
• § 5106 — (a) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it to the person requested to advise or to the beneficia
• § 5107 — (a) A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its confirmation.
• § 5108 — (a) Except as otherwise provided in Section 5109, an issuer shall honor a presentation that, as determined by the standard practice referred to in subdivision (e), appears on its face strictly to comp
• § 5109 — (a) If a presentation is made that appears on its face strictly to comply with the terms and conditions of the letter of credit, but a required document is forged or materially fraudulent, or honor of
• § 5110 — (a) If its presentation is honored, the beneficiary warrants: (1) to the issuer, any other person to whom presentation is made, and the applicant that there is no fraud or forgery of the kind describe
• § 5111 — (a) If an issuer wrongfully dishonors or repudiates its obligation to pay money under a letter of credit before presentation, the beneficiary, successor, or nominated person presenting on its own beha
• § 5112 — (a) Except as otherwise provided in Section 5113, unless a letter of credit provides that it is transferable, the right of a beneficiary to draw or otherwise demand performance under a letter of credi
• § 5113 — (a) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in the name of the beneficiary without disclosing its status as a su
• § 5114 — (a) In this section, “proceeds of a letter of credit” means the cash, check, accepted draft, or other item of value paid or delivered upon honor or giving of value by the issuer or any nominated perso
• § 5115 — An action to enforce a right or obligation arising under this article must be commenced within one year after the expiration date of the relevant letter of credit or one year after the cause of action