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(810 ILCS 5/Art.
3 Pt. 5 heading)
PART
5. DISHONOR
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(810 ILCS 5/3-501) (from Ch. 26,
par. 3-501)
Sec. 3-501. Presentment.
(a) "Presentment" means
a demand made by or on behalf of a person entitled to enforce
an instrument (i) to pay the instrument made to the drawee
or a party obliged to pay the instrument or, in the case of
a note or accepted draft payable at a bank, to the bank or
(ii) to accept a draft made to the drawee.
(b) The following rules are subject
to Article 4, agreement of the parties, and clearing-house
rules and the like:
(1) Presentment
may be made at the place of payment
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of the instrument and must be made at
the place of payment if the instrument is payable
at a bank in the United States; may be made by
any commercially reasonable means, including an
oral, written, or electronic communication; is
effective when the demand for payment or acceptance
is received by the person to whom presentment is
made; is effective if made to any one of 2 or more
makers, acceptors, drawees or other payors.
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(2)
Upon demand of the person to whom presentment is
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made, the person making presentment
must (i) exhibit the instrument, (ii) give reasonable
identification and, if presentment is made on behalf
of another person, reasonable evidence of authority
to do so, and (iii) sign a receipt on the instrument
for any payment made or surrender the instrument
if full payment is made.
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(3)
Without dishonoring the instrument, the party to
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whom presentment is made may (i) return
the instrument for lack of a necessary endorsement,
or (ii) refuse payment or acceptance for failure
of the presentment to comply with the terms of
the instrument, an agreement of the parties, or
other applicable law or rule.
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(4)
The party to whom presentment is made may treat
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presentment as occurring on the next
business day after the day of presentment if the
party to whom presentment is made has established
a cut-off hour not earlier than 2 p.m. for
the receipt and processing of instruments presented
for payment or acceptance and presentment is made
after the cut-off hour.
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(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-502) (from Ch. 26,
par. 3-502)
Sec. 3-502. Dishonor.
(a) Dishonor of a note is governed
by the following rules:
(1) If
the note is payable on demand, the note is
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dishonored if presentment is duly made
to the maker and the note is not paid on the day
of presentment.
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(2)
If the note is not payable on demand and is
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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.
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(3)
If the note is not payable on demand and
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paragraph (2) does not apply, the note
is dishonored if it is not paid on the day it becomes
payable.
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(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
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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 Section 4-301 or 4-302, or becomes
accountable for the amount of the check under Section
4-302.
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(2)
If a draft is payable on demand and paragraph
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(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.
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(3)
If a draft is payable on a date stated in the
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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.
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(4)
If a draft is payable on elapse of a period of
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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.
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(c) Dishonor of
an unaccepted documentary draft occurs according to the
rules stated in subsection (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
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dishonored if presentment for payment
is duly made to the acceptor and the draft is not
paid on the day of presentment.
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(2)
If the draft is not payable on demand, the draft
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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.
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(e) In any case
in which presentment is otherwise required for dishonor
under this Section and presentment is excused under Section
3-504, 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.
(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-503) (from Ch. 26,
par. 3-503)
Sec. 3-503. Notice of dishonor.
(a) The obligation of an indorser
stated in Section 3-415(a) and the obligation of a drawer
stated in Section 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 Section 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 a sufficient notice of dishonor.
(c) Subject to Section 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.
(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-504) (from Ch. 26,
par. 3-504)
Sec. 3-504. Excused presentment
and notice of dishonor.
(a) Presentment for payment or
acceptance of an instrument is excused if (i) the person entitled
to present the instrument cannot with reasonable diligence make
presentment, (ii) the maker or acceptor has repudiated an obligation
to pay the instrument or is dead or in insolvency proceedings,
(iii) by the terms of the instrument presentment is not necessary
to enforce the obligation of indorsers or the drawer, (iv) the
drawer or indorser whose obligation is being enforced has waived
presentment or otherwise has no reason to expect or right to
require that the instrument be paid or accepted, or (v) the drawer
instructed the drawee not to pay or accept the draft or the drawee
was not obligated to the drawer to pay the draft.
(b) Notice of dishonor is excused
if (i) by the terms of the instrument notice of dishonor is not
necessary to enforce the obligation of a party to pay the instrument,
or (ii) the party whose obligation is being enforced waived notice
of dishonor. A waiver of presentment is also a waiver of notice
of dishonor.
(c) Delay in giving notice of dishonor
is excused if the delay was caused by circumstances beyond the
control of the person giving the notice and the person giving
the notice exercised reasonable diligence after the cause of
the delay ceased to operate.
(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-505) (from Ch. 26,
par. 3-505)
Sec. 3-505. Evidence of dishonor.
(a) The following are admissible
as evidence and create a presumption of dishonor and of any notice
of dishonor stated:
(1) a document
regular in form as provided in
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subsection (b) which purports to be
a protest;
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(2)
a purported stamp or writing of the drawee,
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payor bank, or presenting bank on or
accompanying the instrument stating that acceptance
or payment has been refused unless reasons for
the refusal are stated and the reasons are not
consistent with dishonor;
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(3)
a book or record of the drawee, payor bank, or
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collecting bank, kept in the usual course
of business which shows dishonor, even if there
is no evidence of who made the entry.
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(b) A protest
is a certificate of dishonor made by a United States consul
or vice consul, or a notary public or other person authorized
to administer oaths by the law of the place where dishonor
occurs. It may be made upon information satisfactory to
that person. The protest must identify the instrument and
certify either that presentment has been made or, if not
made, the reason why it was not made, and that the instrument
has been dishonored by nonacceptance or nonpayment. The
protest may also certify that notice of dishonor has been
given to some or all parties.
(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-505A) (from Ch. 26,
par. 3-505A)
Sec. 3-505A. Provision of
credit card number as a condition of check cashing or acceptance
prohibited.
(1) No person may record the number
of a credit card given as identification or given as proof of
creditworthiness when payment for goods or services is made by
check or draft other than a transaction in which the check or
draft is issued in payment of the credit card designated by the
credit card number.
(2) This Section shall not prohibit
a person from requesting a purchaser to display a credit card
as indication of creditworthiness and financial responsibility
or as additional identification, but the only information concerning
a credit card which may be recorded is the type of credit card
so displayed and the issuer of the credit card. This Section
shall not require acceptance of a check or draft whether or not
a credit card is presented.
(3) This Section shall not prohibit
a person from requesting or receiving a credit card number or
expiration date and recording the number or date, or both, in
lieu of a deposit to secure payment in the event of default,
loss, damage, or other occurrence.
(4) This Section shall not prohibit
a person from recording a credit card number and expiration date
as a condition for cashing or accepting a check or draft if that
person, firm, partnership or association has agreed with the
card issuer to cash or accept checks and share drafts from the
issuer's cardholders and the issuer guarantees cardholder checks
and drafts cashed or accepted by that person.
(5) Recording a credit card number
in connection with a sale of goods or services in which the purchaser
pays by check or draft, or in connection with the acceptance
of a check or draft, is a business offense with a fine not to
exceed $500.
As used in this Section, credit
card has the meaning as defined in the Illinois Credit Card and
Debit Card Act.
(Source: P.A. 87-382.)
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