Tex. Bus. & Com. Code 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 non-payment 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) 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 Subsection (a)(1), 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967. Amended by Acts 1995, 74th Leg., ch. 921, Sec. 4, eff. Jan. 1, 1996.

Source: Section 4.202 — Responsibility for Collection or Return; When Action Timely, https://statutes.­capitol.­texas.­gov/Docs/BC/htm/BC.­4.­htm#4.­202 (accessed Jun. 5, 2024).

4.101
Short Title 4.102
Applicability 4.103
Variation by Agreement 4.104
Definitions and Index of Definitions 4.106
Payable Through or Payable at Bank 4.107
Separate Office of a Bank 4.108
Time of Receipt of Items 4.109
Delays 4.110
Electronic Presentment 4.111
Statute of Limitations 4.112
Payment of Check at Par 4.202
Responsibility for Collection or Return 4.203
Effect of Instructions 4.204
Methods of Sending and Presenting 4.205
Depository Bank Holder of Unindorsed Item 4.206
Transfer Between Banks 4.207
Transfer Warranties 4.208
Presentment Warranties 4.209
Encoding and Retention Warranties 4.210
Security Interest of Collecting Bank in Items, Accompanying Documents and Proceeds 4.211
When Bank Gives Value for Purposes of Holder in Due Course 4.212
Presentment by Notice of Item Not Payable By, Through or at a Bank 4.213
Medium and Time of Settlement by Bank 4.214
Right of Charge-back or Refund 4.215
Final Payment of Item by Payor Bank 4.216
Insolvency and Preference 4.301
Deferred Posting 4.302
Payor Bank’s Responsibility for Late Return of Item 4.303
When Items Subject to Notice, Stop-payment Order, Legal Process, or Setoff 4.401
When Bank May Charge Customer’s Account 4.402
Bank’s Liability to Customer for Wrongful Dishonor 4.403
Customer’s Right to Stop Payment 4.404
Bank Not Obligated to Pay Check More than Six Months Old 4.405
Death or Incompetence of Customer 4.406
Customer’s Duty to Discover and Report Unauthorized Signature or Alteration 4.407
Payor Bank’s Right to Subrogation on Improper Payment 4.501
Handling of Documentary Drafts 4.503
Responsibility of Presenting Bank for Documents and Goods 4.504
Privilege of Presenting Bank to Deal with Goods
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Accessed:
Jun. 5, 2024

§ 4.202’s source at texas​.gov