§ 3503 Notice Of Dishonor Requirements

This law says you can't force someone who signed a check (or wrote it) to pay unless they get a clear notice that the check bounced or wasn't paid.

Key Takeaways

•You must tell the signer that a check was not paid before you can make them pay.
•Notice can be given in any reasonable way – a phone call, an email, a letter, or even returning the check to the bank.
•If a bank is handling the check, it must give notice by the end of the next banking day, or anyone else has 30 days to give notice.

Example

Jane writes a check to her landlord for rent, but the check bounces. The bank returns the check to the landlord, which counts as notice that the check was not paid.

Because the landlord got notice (the returned check), the landlord can now demand payment from Jane. If the landlord never got any notice, they couldn't legally force Jane to pay under this rule.

(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 drawer is given notice of dishonor of the instrument complying with this section or (2) notice of dishonor is excused under subdivision (b) of Section 3504. (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 subdivision (c) of Section 3504, with respect to an instrument taken for collection by a collecting bank, notice of dishonor shall be given (1) 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 (2) 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 shall be given within 30 days following the day on which dishonor occurs. (Repealed and added by Stats. 1992, Ch. 914, Sec. 6. Effective January 1, 1993.)

This law says you can't force someone who signed a check (or wrote it) to pay unless they get a clear notice that the check bounced or wasn't paid.

Key Takeaways

•You must tell the signer that a check was not paid before you can make them pay.
•Notice can be given in any reasonable way – a phone call, an email, a letter, or even returning the check to the bank.
•If a bank is handling the check, it must give notice by the end of the next banking day, or anyone else has 30 days to give notice.

Example

Jane writes a check to her landlord for rent, but the check bounces. The bank returns the check to the landlord, which counts as notice that the check was not paid.

Because the landlord got notice (the returned check), the landlord can now demand payment from Jane. If the landlord never got any notice, they couldn't legally force Jane to pay under this rule.

Key Takeaways

Example

Key Terms

References

§ 3503 Notice Of Dishonor Requirements

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References