New Jersey § 12a:4-302

§ 12a:4-302.

a. If an item is presented to and received by a payor bank, the bank is accountable

for the amount of: (1) a demand item, other than a documentary draft, whether properly payable or not,

if the bank, in any case in which it is not also the depositary bank, retains the

item beyond midnight of the banking day of receipt without settling for it or, whether

or not it is also the depositary bank, does not pay or return the item or send notice

of dishonor until after its midnight deadline; or (2) any other properly payable item unless, within the time allowed for acceptance

or payment of that item, the bank either accepts or pays the item or returns it and

accompanying documents. b. The liability of a payor bank to pay an item pursuant to subsection a. of this

section is subject to defenses based on breach of a presentment warranty (12A:4-208)

or proof that the person seeking enforcement of the liability presented or transferred

the item for the purpose of defrauding the payor bank.