J. MILLARD TAWES, Governor                        853

3—505. Rights of Party to Whom Presentment is Made.

(1)  The party to whom presentment is made may without dis-
honor require

(a)  exhibition of the instrument; and

(b)  reasonable identification of the person making presentment
and evidence of his authority to make it if made for another; and

(c)  that the instrument be produced for acceptance or payment
at a place specified in it, or if there be none at any place reasonable
in the circumstances; and

(d)  a signed receipt on the instrument for any partial or full pay-
ment and its surrender upon full payment.

(2)  Failure to comply with any such requirement invalidates the
presentment but the person presenting has a reasonable time in which
to comply and the time for acceptance or payment runs from the
time of compliance.

3—506. Time Allowed for Acceptance or Payment.

(1)  Acceptance may be deferred without dishonor until the close
of the next business day following presentment. The holder may also
in a good faith effort to obtain acceptance and without either dis-
honor of the instrument or discharge of secondary parties allow
postponement of acceptance for an additional business day.

(2)  Except as a longer time is allowed in the case of documentary
drafts drawn under a letter of credit, and unless an earlier time is
agreed to by the party to pay, payment of an instrument may be
deferred without dishonor pending reasonable examination to deter-
mine whether it is properly payable, but payment must be made in
any event before the close of business on the day of presentment.

3—507. Dishonor; Holder's Right of Recourse; Term Allowing Re-
presentment.

(1)  An instrument is dishonored when

(a)  a necessary or optional presentment is duly made and due
acceptance or payment is refused or cannot be obtained within the
prescribed time or in case of bank collections the instrument is sea-
sonably returned by the midnight deadline (Section 4—301); or

(b)  presentment is excused and the instrument is not duly ac-
cepted or paid.

(2)  Subject to any necessary notice of dishonor and protest, the
holder has upon dishonor an immediate right of recourse against the
drawers and indorsers.

(3)  Return of an instrument for lack of proper indorsement is not
dishonor.

(4) A term in a draft or an indorsement thereof allowing a stated
time for re-presentment in the event of any dishonor of the draft by
nonacceptance if a time draft or by nonpayment if a sight draft gives
the holder as against a secondary party bound by the term an option
to waive the dishonor without affecting the liability of the secondary
party and he may present again up to the end of the stated time.