Also known as: written notices of dishonor · notice of dishonor · written dishonor notice
Written by attorneys · grounded in primary & secondary sources — see below
A formal communication stating that a negotiable instrument has been dishonored. The communication must reasonably identify the instrument and indicate that it has not been paid or accepted. It may be given by any person through any commercially reasonable means.
Wallace Webb indorses a check drawn by Wyatt Wilson and deposits it at his bank. The payor bank returns the check unpaid after the midnight deadline. The holder sends Wallace a written notice identifying the check and stating it was dishonored. Because the notice complies with the timing and content rules, Wallace remains liable on his indorsement.
Winterhaven Logistics draws a check on its account at Westmont Healthcare's bank and delivers it to Wellesley Media. The payor bank receives the check for collection but fails to pay or return it by the midnight deadline. Wellesley Media sends Winterhaven a written notice of dishonor the next day. The notice preserves Wellesley Media's right to enforce the drawer's obligation.
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The notice must reasonably identify the instrument and indicate that the instrument has been dishonored or has not been paid or accepted. Return of the instrument itself to a collecting bank counts as sufficient notice.
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For a check presented other than for immediate payment over the counter, the payor bank must make timely return or send timely notice of dishonor under the midnight-deadline rules. Failure to do so discharges secondary parties unless notice is excused.
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Delay discharges the indorser only if the notice is required and not given in compliance with the statute. Delay is excused when caused by circumstances beyond the control of the person giving notice who then exercises reasonable diligence.
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