KRS 355.4-503: Responsibility of presenting bank for documents and goods -- Report of

reasons for dishonor -- Referee in case of need.

Unless otherwise instructed and except as provided in Article 5 of this chapter, a bank

presenting a documentary draft:

(1) Must deliver the documents to the drawee on acceptance of the draft if it is payable

more than three (3) days after presentment; otherwise, only on payment; and

(2) Upon dishonor, either in the case of presentment for acceptance or presentment for

payment, may seek and follow instructions from any referee in case of need

designated in the draft or, if the presenting bank does not choose to utilize the

referee's services, it must use diligence and good faith to ascertain the reason for

dishonor, must notify its transferor of the dishonor and of the results of its efforts to

ascertain the reasons therefor, and must request instructions.

However, the presenting bank is under no obligation with respect to goods represented by

the documents except to follow any reason able instructions seasonably received; it has a

right to reimbursement for any expense incurred in following instructions and to

prepayment of or indemnity for those expenses.