                                 CODE OF VIRGINIA

DISHONOR (§ 8.3A-502)

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 presentment.

   2. If the note is not payable on demand and is payable at or through a bank or
   the terms of the note require presentment, the note is dishonored if
   presentment is duly made and the note is not paid on the day it becomes
   payable or the day of presentment, whichever is later.

   3. If the note is not payable on demand and paragraph (2) does not apply, the
   note is dishonored if it is not paid on the day it becomes payable.

b. Dishonor of an unaccepted draft other than a documentary draft is governed by
the following rules:

   1. If a check is duly presented for payment to the payor bank otherwise than
   for immediate payment over the counter, the check is dishonored if the payor
   bank makes timely return of the check or sends timely notice of dishonor or
   nonpayment under &#xA7; 8.4-301 or &#xA7; 8.4-302, or becomes accountable for
   the amount of the check under &#xA7; 8.4-302.

   2. If a draft is payable on demand and paragraph (1) does not apply, the draft
   is dishonored if presentment for payment is duly made to the drawee and the
   draft is not paid on the day of presentment.

   3. If a draft is payable on a date stated in the draft, the draft is
   dishonored if (i) presentment for payment is duly made to the drawee and
   payment is not made on the day the draft becomes payable or the day of
   presentment, whichever is later, or (ii) presentment for acceptance is duly
   made before the day the draft becomes payable and the draft is not accepted on
   the day of presentment.

   4. If a draft is payable on elapse of a period of time after sight or
   acceptance, the draft is dishonored if presentment for acceptance is duly made
   and the draft is not accepted on the day of presentment.

c. Dishonor of an unaccepted documentary draft occurs according to the rules
stated in subsections (b) (2), (3), and (4), except that payment or acceptance
may be delayed without dishonor until no later than the close of the third
business day of the drawee following the day on which payment or acceptance is
required by those paragraphs.

d. Dishonor of an accepted draft is governed by the following rules:

   1. If the draft is payable on demand, the draft is dishonored if presentment
   for payment is duly made to the acceptor and the draft is not paid on the day
   of presentment.

   2. If the draft is not payable on demand, the draft is dishonored if
   presentment for payment is duly made to the acceptor and payment is not made
   on the day it becomes payable or the day of presentment, whichever is later.

e. In any case in which presentment is otherwise required for dishonor under
this section and presentment is excused under &#xA7; 8.3A-504, dishonor occurs
without presentment if the instrument is not duly accepted or paid.

f. If a draft is dishonored because timely acceptance of the draft was not made
and the person entitled to demand acceptance consents to a late acceptance, from
the time of acceptance the draft is treated as never having been dishonored.

HISTORY: Code 1950, §§ 6-432 through 6-435, 6-436, 6-462, 6-464 through 6-469,
6-471, 6-496, 6-500 through 6-502, 6-505; 1964, c. 219, §§ 8.3-501, 8.3-507,
8.3-511; 1992, c. 693.