                                 CODE OF VIRGINIA

DEFERRED POSTING; RECOVERY OF PAYMENT BY RETURN OF ITEMS; TIME OF DISHONOR;
RETURN OF ITEMS BY PAYOR BANK (§ 8.4-301)

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 bank may revoke the settlement and
recover the settlement if, before it has made final payment and before its
midnight deadline, it

   1. returns the item; or

   2. sends written notice of dishonor or nonpayment if the item is unavailable
   for return.

b. If a demand item is received by a payor bank for credit on its books, it may
return the item or send notice of dishonor and may revoke any credit given or
recover the amount thereof withdrawn by its customer, if it acts within the time
limit and in the manner specified in subsection (a).

c. Unless previous notice of dishonor has been sent, an item is dishonored at
the time when for purposes of dishonor it is returned or notice sent in
accordance with this section.

d. An item is returned:

   1. as to an item presented through a clearing house, when it is delivered to
   the presenting or last collecting bank or to the clearing house or is sent or
   delivered in accordance with clearing-house rules; or

   2. in all other cases, when it is sent or delivered to the bank&#8217;s
   customer or transferor or pursuant to his instructions.

HISTORY: Code 1950, §§ 6-543.1 to 6-543.3, pp. 60, 61; 1964, c. 219; 1992, c.
693.