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84-4-502. Presentment of "on arrival" drafts. If a draft or the relevant instructions require presentment "on arrival," "when goods arrive" or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to pay or accept because the goods have not arrived is not dishonor; the bank must notify its transferor of the refusal but need not present the draft again until it is instructed to do so or learns of the arrival of the goods.

History: L. 1965, ch. 564, § 235; L. 1991, ch. 296, § 108; February 1, 1992.

KANSAS COMMENT, 1996

This section is identical to the 1995 Official Text. The section is derived from the former 84-4-502 with stylistic amendments not meant to change the substantive law.

The only Kansas decisional reference to "on arrival" drafts is found in Feeders Supply Co. v. First National Bank, 103 K. 654, 176 P. 129 (1918). The term "on arrival" technically refers to the goods and not to the drafts. Therefore, if the bank in the buyer's town is dealing with a draft that requires presentment "on arrival" or "when goods arrive," it is not obligated to make immediate presentment; it may delay presentment until "in its judgment a reasonable time for arrival of the goods has expired." Alternatively, the draft may be payable at sight, but the instructions to the presenting bank will call for presentment "on arrival."


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