Printable Format84-3-503. Notice of dishonor. (a) The obligation of an endorser stated in K.S.A. 84-3-416(a) [84-3-415(a)] and the obligation of a drawer stated in K.S.A. 84-3-415(d) [84-3-414(d)] may not be enforced unless (1) the endorser or drawer is given notice of dishonor of the instrument complying with this section or (2) notice of dishonor is excused under K.S.A. 84-3-504(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 sufficient notice of dishonor.
(c) Subject to K.S.A. 84-3-504(c), with respect to an instrument taken for collection by a collecting bank, notice of dishonor must 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 must be given within 30 days following the day on which dishonor occurs.
History: L. 1991, ch. 296, § 60; February 1, 1992.
KANSAS COMMENT, 1996
This section is identical to the 1995 Official Text except the lower case roman numerals have been replaced by arabic numbers. This section is derived from the former 84-3-501(2)(a) and 84-3-508. Historical case and statutory references can be obtained from the 1965 and 1983 bound volume 7 of the Kansas Statutes Annotated.
Timely notice of dishonor is a precondition for any indorser liability. It may be given by any one, and in any commercially reasonable manner. Because proof of the notice of dishonor may be required later, it is wise to give notice in a form which can be proven if litigation should occur. See 84-3-505. 84-4-213 and 84-4-301 have specific rules for notice of dishonor for collecting banks and for the payor bank, requiring physical sending of notice.
Unless excused (84-3-504), notice of dishonor must be given within the following times. Banks (84-4-105) must give notice by the "midnight deadline," midnight of the banking day following the banking day of receipt. Others have 30 days to give notice of dishonor, far longer than the three days previously allowed by the former 84-3-508(2).
Revisor's Note:
Former section 84-3-503 was repealed by L. 1991, ch. 296, § 111 and the number reassigned to the current text.