Ark. Code Ann. » Title 4 Chapter 03
Arkansas Code Annotated

Ark. Code Ann. § 4-3-414 (2026)

Obligation of drawer

✓ current as of May 2026
Find cases: SyfertCases citing this section JustiaArk. Code CornellLII Search CasesGoogle Scholar
  1. This section does not apply to cashier's checks or other drafts drawn on the drawer.
  2. If an unaccepted draft is dishonored, the drawer is obliged to pay the draft (i) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder, or (ii) if the drawer signed an incomplete instrument, according to its terms when completed, to the extent stated in §§ 4-3-115 and 4-3-407. The obligation is owed to a person entitled to enforce the draft or to an indorser who paid the draft under § 4-3-415.
  3. If a draft is accepted by a bank, the drawer is discharged, regardless of when or by whom acceptance was obtained.
  4. If a draft is accepted and the acceptor is not a bank, the obligation of the drawer to pay the draft if the draft is dishonored by the acceptor is the same as the obligation of an indorser under § 4-3-415(a) and (c).
  5. If a draft states that it is drawn “without recourse” or otherwise disclaims liability of the drawer to pay the draft, the drawer is not liable under subsection (b) to pay the draft if the draft is not a check. A disclaimer of the liability stated in subsection (b) is not effective if the draft is a check.
  6. If (i) a check is not presented for payment or given to a depositary bank for collection within thirty (30) days after its date, (ii) the drawee suspends payments after expiration of the thirty-day period without paying the check, and (iii) because of the suspension of payments, the drawer is deprived of funds maintained with the drawee to cover payment of the check, the drawer to the extent deprived of funds may discharge its obligation to pay the check by assigning to the person entitled to enforce the check the rights of the drawer against the drawee with respect to the funds.

History. Acts 1991, No. 572, § 5.

Case Notes

Discharge Upheld.

The obligation of the issuer of a check was discharged at the time of payment, notwithstanding that one of the joint payees cashed the check and refused to pay an amount due to the other joint payee. A.C.E., Inc. v. Inland Mtg. Co., 333 Ark. 232, 969 S.W.2d 176 (1998).

Notes of Decisions
Cited in 2 cases, 1988–1998 · leading case: McIlroy Bank & Trust v. Maestri, 759 S.W.2d 808 (Ark. 1988).
Sort: Relevance Newest Treatment
McIlroy Bank & Trust v. Maestri, 759 S.W.2d 808 (Ark. 1988). · cites it 2× “Ark. Code Ann. § 4-3-414 (2) (1987). Our next concern is what effect extensions of the note had on Paul Maestri’s liability as an accommodation maker.”
A.C.E., Inc. v. Inland Mortg. Co., 969 S.W.2d 176 (Ark. 1998). · cites it 8× “The trial court held the decision in GMAC did not apply because of a factual difference, namely, in GMAC, the drawer sent the check directly to the wrongdoer co-payee instead of giving it to GMAC, the co-payee lienholder.”
— Ark. Code Ann. § 4-3-414(c) — 1 case
A.C.E., Inc. v. Inland Mortg. Co., 969 S.W.2d 176 (Ark. 1998). “The trial court held the decision in GMAC did not apply because of a factual difference, namely, in GMAC, the drawer sent the check directly to the wrongdoer co-payee instead of giving it to GMAC, the co-payee lienholder.”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.