Mich. Comp. Laws » Michigan Compiled Laws / Chapter 440 / Act 174 of 1962
Michigan Compiled Laws

Mich. Comp. Laws § 440.4202 (2026)

Collecting bank; duties; exercising ordinary care; liability.

✓ current as of July 2026
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UNIFORM COMMERCIAL CODE


Act 174 of 1962


440.4202 Collecting bank; duties; exercising ordinary care; liability.

Sec. 4202.

    (1)  A collecting bank must exercise ordinary care in all of the following:

    (a) Presenting an item or sending it for presentment.

    (b) Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank's transferor after learning that the item has not been paid or accepted, as the case may be.

    (c) Settling for an item when the bank receives final settlement.

    (d) Notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.

    (2) A collecting bank exercises ordinary care under subsection (1) by taking proper action before its midnight deadline following receipt of an item, notice, or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.

    (3) Subject to subsection (1)(a), a bank is not liable for the insolvency, neglect, misconduct, mistake, or default of another bank or person or for loss or destruction of an item in the possession of others or in transit.

History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993

Notes of Decisions
Cited in 2 cases, 1969–1991 · leading case: Check Reporting Servs., Inc v. Michigan Nat'l Bank-Lansing, 478 N.W.2d 893 (Mich. Ct. App. 1991).
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Check Reporting Servs., Inc v. Michigan Nat'l Bank-Lansing, 478 N.W.2d 893 (Mich. Ct. App. 1991). · cites it 2× “MCL 440.4202; MSA 19.4202 requires in part that a collecting bank use ordinary care in the exercise of its basic collection tasks.”
Mfrs. Nat'l Bank of Detroit v. Sutherland, 167 N.W.2d 894 (Mich. Ct. App. 1969). · cites it 2× “Therefore, the plaintiff, as a collecting agent, clearly had a right to demand repayment from defendants upon dishonor of the instrument, provided they had per *291 formed all of the necessary duties of a collecting bank, as we think they did, PA 1962, No 174, § 4202 (MCLA…”
Mich. Comp. Laws § 440.4202(2): 1 case
Check Reporting Servs., Inc v. Michigan Nat'l Bank-Lansing, 478 N.W.2d 893 (Mich. Ct. App. 1991). “MCL 440.4202; MSA 19.4202 requires in part that a collecting bank use ordinary care in the exercise of its basic collection tasks.”
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