Subject to Division 3 (commencing with Section 3101) concerning conversion of instruments (Section 3420) and restrictive indorsements (Section 3206), only a collecting bank’s transferor can give instructions that affect the bank or constitute notice to it, and a collecting bank is not liable to prior parties for any action taken pursuant to the instructions or in accordance with any agreement with its transferor.
Cal. Com. Code § 4203
Collection of Items: Depositary and Collecting Banks
Known as the Uniform Commercial Code
The act spans §§ 1101–12107 (623 sections).
Amended by Stats. 1992, Ch. 914, Sec. 20
Official source: California Legislative Information. Reproduced from public-domain California statutes; confirm against the official source for the current text. Not legal advice.