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HomeCommercial CodeDiv. 4Ch. 5§ 4503 Documentary Draft Presentation Rules

§ 4503 Documentary Draft Presentation Rules

Commercial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 4503 Documentary Draft Presentation Rules

Key Takeaways

  • •If a bank gives you papers for something you bought, they only hand them over after you pay or promise to pay later (if it's more than 3 days away).
  • •If you refuse to pay or accept, the bank must try to find out why and tell the person who sent the papers.
  • •The bank doesn’t have to do anything with the actual stuff you bought—just follow instructions if they get any.

Example

You order a new bike online, and the bank holds the bike’s papers until you pay.

The bank won’t give you the bike’s papers until you pay. If you refuse to pay, the bank tells the seller why and asks what to do next.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 4503 Documentary Draft Presentation Rules

Unless otherwise instructed and except as provided in Division 5 (commencing with Section 5101), a bank presenting a documentary draft: (a) Shall deliver the documents to the drawee on acceptance of the draft if it is payable more than three days after presentment; otherwise, only on payment. (b) Upon dishonor, either in the case of presentment for acceptance or presentment for payment, may seek and follow instructions from any referee in case of need designated in the draft or, if the presenting bank does not choose to utilize the referee’s services, it shall use diligence and good faith to ascertain the reason for dishonor, shall notify its transferor of the dishonor and of the results of its effort to ascertain the reasons therefor, and shall request instructions. However, the presenting bank is under no obligation with respect to goods represented by the documents except to follow any reasonable instructions seasonably received; it has a right to reimbursement for any expense incurred in following instructions and to prepayment of or indemnity for those expenses. (Amended by Stats. 1992, Ch. 914, Sec. 49. Effective January 1, 1993.)

Last verified: January 23, 2026

Key Terms

documentary draftdraweedishonorreferee in case of needreasonable instructions

Related Statutes

  • § 2514 Draft Document Delivery Rules
  • § 3501 Presentment Definition
  • § 3502 Note And Draft Dishonor Rules
  • § 3505 Evidence Of Dishonor
  • § 4501 Bank Draft Collection Notice

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Commercial Code. Section 4503.
View Official Source