Author Topic: WA Law- Collection laws for Checks- How, and how not to - Questions  (Read 615 times)

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Mischievous Smurfy

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To avoid "muddying" the waters I will ask my questions here...   although I'm not in WA, you never know when this information might come in handy.

62A.3-503
Notice of dishonor.
(a) The obligation of an indorser stated in RCW 62A.3-415(a) and the obligation of a drawer stated in RCW 62A.3-414(d) may not be enforced unless (i) the indorser or drawer is given notice of dishonor of the instrument complying with this section or (ii) notice of dishonor is excused under RCW 62A.3-504(b).

     (b) Notice of dishonor may be given by any person; may be given by any commercially reasonable means, including an oral, written, or electronic communication; and is sufficient if it reasonably identifies the instrument and indicates that the instrument has been dishonored or has not been paid or accepted. Return of an instrument given to a bank for collection is sufficient notice of dishonor.

     (c) Subject to RCW 62A.3-504(c), with respect to an instrument taken for collection by a collecting bank, notice of dishonor must be given (i) by the bank before midnight of the next banking day following the banking day on which the bank receives notice of dishonor of the instrument, or (ii) by any other person within 30 days following the day on which the person receives notice of dishonor. With respect to any other instrument, notice of dishonor must be given within 30 days following the day on which dishonor occurs.


Does that mean the payee of the instrument must notice the account holder within 30 days?  and if so, what if they didn't?
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dls7406

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Re: WA Law- Collection laws for Checks- How, and how not to - Questions
« Reply #1 on: August 10, 2009 09:17:06 PM »
Ok, to simplify this entire head ballet, let's read it backwards so it makes more sense. Otherwise it's easy to get overwhelmed:

It basically says two and a half things:

1. One group must give notice 30 days after dishonor OCCURS. With respect to any other instrument, notice of dishonor must be given within 30 days following the day on which dishonor occurs.

2. In english, if a check (written by Bob to Joe) is given by the recipient to a bank that it was NOT drawn on (lets say a wells fargo check from Bob was deposited in Joe's BofA account) and wells Fargo gives Notice of dishonor to BofA, BofA has until the end of the next banking day to notify Joe of the dishonor or he is not obliged to perform under rcw 62a.3-415 (A).

dls7406

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Re: WA Law- Collection laws for Checks- How, and how not to - Questions
« Reply #2 on: August 11, 2009 09:13:36 AM »
To answe your question more clearly:

The answer is a resounding yes, unless circumstances dictate the answer be no, PROVIDED that in certain instances facts may preclude an answer as previously provided herein, in which case a definitive answer of maybe shall apply.

Hope that clears things up for you.

And welcome to the mental merry-go-round that is Washington statute construction.

 

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