The Lawletter Vol 47 No 2
As part of the check collection process governed by Article 4 of the Uniform Commercial Code (“UCC”), the “midnight deadline” rule of § 4-302 requires that a payor bank pay or return an item, or send notice of its dishonor, before midnight of the next banking day following the banking day on which the bank receives the item. The rule imposes strict liability on a payor bank that fails to meet the midnight deadline requirement. But what if something happens to the payee while the check is being dishonored as part of the collection process? Who has standing to sue the payor bank to enforce the midnight deadline rule?
That was the unusual question decided by the Virginia Supreme Court in Stahl v. Stitt, ___ Va. ___, 869 S.E.2d 55 (2022).Read More