Ala. Code
Code of Alabama

Ala. Code § 7-3-503 (2026)

Notice of Dishonor.

✓ official Alabama Legislature (ALISON) text, current July 2026
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(a) The obligation of an indorser stated in Section 7-3-415(a) and the obligation of a drawer stated in Section 7-3-414(d) may not be enforced unless (i) the indorser or drawer is given notice of dishonor of the instrument complying with this section or (ii) notice of dishonor is excused under Section 7-3-504(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 Section 7-3-504(c), with respect to an instrument taken for collection by a collecting bank, notice of dishonor must be given (i) 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 (ii) 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.

(Acts 1995, No. 95-668, p. 1381, §1.)

Notes of Decisions
Cited in 1 case, 2001–2001 · leading case: Asaro v. Kmart, Inc., 824 So. 2d 792 (Ala. Civ. App. 2001).
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Asaro v. Kmart, Inc., 824 So. 2d 792 (Ala. Civ. App. 2001). ““(b) For the purposes of this section, it is prima facie evidence that the maker or drawer intended, knew or expected that the instrument would not be honored if: “(1) The maker or drawer had no account with the drawee at the time the negotiable instrument was negotiated or…”
— Ala. Code § 7-3-503(2) — 1 case
Asaro v. Kmart, Inc., 824 So. 2d 792 (Ala. Civ. App. 2001). ““(b) For the purposes of this section, it is prima facie evidence that the maker or drawer intended, knew or expected that the instrument would not be honored if: “(1) The maker or drawer had no account with the drawee at the time the negotiable instrument was negotiated or…”
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