III. COMMERCIAL LAW

A. BANK DEPOSITS AND COLLECTIONS.

 

1. In general. Any action to enforce an obligation, duty, or right arising under Article Four of the Uniform Commercial Code as adopted in Arkansas must be brought within three (3) years after the cause of action accrues. A.C.A. § 4-4-111 (Repl. 2001).

 

2. Warranties.

 

a. Presentment warranties. Unless notice of a claim for a breach of a presentment warranty is given to the warrantor within thirty (30) days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged from liability to the extent of any loss caused by the delay in giving notice of the claim. A.C.A. § 4-4-208(e) (Repl. 2001).

 

b. Transfer warranties. Unless notice of a claim for a breach of a transfer warranty is given to the warrantor within thirty (30) days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged from liability to the extent of any loss caused by the delay in giving notice of the claim. A.C.A. § 4­4-207(d) (Repl. 2001).

 

B. COMMERCIAL PAPER. 1. Liability on instrument.

 

a. Accepted draft. An action brought in order to enforce the obligation of a party to pay an accepted draft, other than a certified check, must be brought (a) within five (5) years after the due date or dates stated in the draft or acceptance if the obligation of the acceptor is payable at a definite time, or (b) within six (6) years after the date of the acceptance if the obligation of the acceptor is payable on demand. A.C.A. § 4-3-118(f) (Repl. 2001).

 

b. Certificate of deposit. A party wishing to bring an action to enforce the obligation of a party to a certificate of deposit to pay the instrument must commence the action within five (5) years after demand for payment is made to the maker, but if the instrument states a due date and the maker is not required to pay before that date, the six-year period begins to accrue when a demand for payment is in effect and the due date has passed. A.C.A. § 4-3-118(e) (Repl. 2001).

 

c. Certified check, teller's check, and traveler's check. A party wishing to bring an action to enforce the obligation of the acceptor of a certified check or the issuer of a

teller's check, cashier's check, or traveler's check must bring the action within three (3) years after demand for payment is made to the acceptor or issuer, as the case may be. A.C.A. § 4-3-118(d) (Repl. 2001).

 

d. Conversion, breach of warranty, and enforcement of duty. An action, unless provided for elsewhere in the U.C.C., for (a) conversion of an instrument, for money had and received, or like action based on conversion; (b) breach of warranty; or (c) enforcement of an obligation, duty or right arising under chapter 3 of title 4 of the U.C.C. and not governed by this section must be brought within three (3) years after the cause of action has accrued. A.C.A. § 4-3-118(g) (Repl. 2001).

 

e. Note payable at a definite time. With certain exceptions, an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within five (5) years after the due date or dates stated in the note or, if the due date is accelerated, within five (5) years after the accelerated due date. A.C.A. § 4-3-118(a) (Repl. 2001).

 

f. Note payable on demand. With certain exceptions, if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note must be brought within five (5) years after the demand. However, if no demand for payment is made to the maker, an action to enforce the note is barred if neither principal nor interest on the note has been paid for a continuous period of ten (10) years. A.C.A. § 4-3-118(b) (Repl. 2001). But see A.C.A. § 16-56-111 (1987 & Supp. 2001) which establishes a five (5) year limitations period for all written contracts from the date the cause of action accrues.

 

g. Unaccepted draft. With certain exceptions, an action to enforce the obligation of a party to an unaccepted draft to pay the draft must be commenced within three (3) years after dishonor of the draft or ten (10) years after the date of the draft, whichever period expires first. A.C.A. § 4-3-118(c) (Repl. 2001).

 

2. Unauthorized signature or alteration. A customer of a bank is precluded from asserting against that bank any unauthorized signature or alteration on an item if the customer fails to exercise reasonable promptness in examining the financial statement or the item and reporting it to the bank and the bank proves that it suffered a loss by reason of the customer's failure. With regard to the customer's unauthorized signature or alteration on other items by the same wrongdoer, the customer will be precluded from asserting a claim against the bank if the customer does not report it to the bank within thirty (30) days and it is paid in good faith by the bank. Without regard to care or lack of care by either the customer or the bank, the customer will be precluded from asserting a claim against the bank unless the customer reports the unauthorized signature or alteration within one (1) year after the statement or the items are made available to the customer. A.C.A. § 4-4­406(d), (f) (Repl. 2001).

3. Warranties.

 

a. Presentment warranties. The liability of the warrantor in connection with a breach of a presentment warranty is discharged to the extent of any loss caused by the delay in giving notice of the claim unless notice of the claim is given to the warrantor within thirty (30) days after the claimant has reason to know of the breach and the identity of the warrantor. A.C.A. § 4-3-417(e) (Repl. 2001).

 

b. Transfer warranties. The liability of the warrantor in connection with a breach of a transfer warranty is discharged to the extent of any loss caused by the delay in giving notice of the claim unless notice of the claim is given to the warrantor within thirty (30) day after the claimant has reason to know of the breach and the identity of the warrantor. A.C.A. § 4-3-416(c) (Repl. 2001).

 

C. SALES.

 

1. Home solicitation.

 

a. Return of payments and goods by seller. Within ten (10) days after a home solicitation contract or offer has been canceled, the seller must tender to the buyer any payments made by the buyer and any note or other evidence of indebtedness. A.C.A. § 4-89-109(a) (Repl. 2001).

 

b. Right to cancel offer or contract by buyer. In addition to any other right to revoke an offer, the buyer has the absolute right to cancel a home solicitation contract or offer until midnight of the third (3rd) calendar day, excluding Sundays and holidays, as declared in A.C.A. § 1-5-101, after the day on which the buyer signs an agreement. A.C.A. § 4-89-107(a) (Repl. 2001).

 

c. Time limit on return of goods by buyer. Within twenty (20) days after a home solicitation contract or offer has been canceled, the buyer, upon demand, must tender to the seller any goods delivered by the seller pursuant to the sale or offer, but he is not obligated to tender at any place other than his own address. A.C.A. § 4-89-110(a)(1) (Repl. 2001).

 

2. Tax sales.

 

a. Attack on decree. A decree confirming tax sale to the state must be attacked by the property owner within one (1) year from its rendition. A.C.A. § 26-38-206(c)(2)(A) (Repl. 1997).

 

b. Contest of validity of sale. Actions to contest the validity of the sale of lands delinquent for taxes shall be commenced within two (2) years from the date of sale, except those persons suffering from mental incapacity, minority, or serving in the U.S. Armed Forces during time of war during the two year period; those persons shall have