Common use of Image Requirements Clause in Contracts

Image Requirements. (i) Client shall only submit to Bank for processing Files based on the following Eligible Items as source documents, and shall ensure Client uses only Eligible Items as source documents to that comply with the following: (a) all instruments must be drawn on or payable through a federally insured depository financial institution; (b) no instrument may be a starter Check; (c) each instrument must be machine-readable full-field magnetic ink character recognition (“MICR”) encoded with the bank routing number, account number and check serial number printed on the Check; and (d) each instrument must be for an amount less than or equal to the approved Check limit assigned by Bank. When Bank receives an Image of a Check transmitted from Client that that has been converted to a digital version of the original Check (a Substitute Check) for subsequent presentment and collection, it shall thereafter be deemed an “item” within the meaning of Articles 3 and 4 of the Uniform Commercial Code. (ii) Each File transmitted by Client to Bank shall contain Images of the front and the back of Checks that are of minimum required size, not too dark, too light, or too bright, and must be legible and scanned and remotely deposited by Client. The Check MICR information must be machine-readable and MICR “on us” field value must contain valid data. Each Image of each Check shall be of such quality so that the following information (which must be included on the Image) can be clearly read and understood from sight review of the Image: (i) the amount of the check; (ii) the payee of the Check; (iii) the signature of the drawer of the Check; (iv) the date of the Check; (v) the Check number; (vi) information identifying the drawer and paying bank that is preprinted on the Check; and (vii) all other information placed on the Check prior to the Image being captured (including, but not limited to, any identification (current phone number and driver’s license number) written on the front of the check or any endorsements on the back of the Check). An Image cannot be missing or incomplete and the Check must be filled out in its entirety for the Check to be processed, and each Check and Image shall contain all proper endorsements. Each Image shall meet all standards of image quality, all requirements necessary to create a Check and must meet all technical requirements of an “electronic item” established by Applicable Law, including Regulation J. Any Check or Image not meeting these minimal requirements or that fails to comply or violates Applicable Law will be ground for immediate suspension or termination of the RDC Services and Client shall indemnify Bank for all losses suffered as a result of or in connection with such failure or violation. (iii) Client shall ensure that each Image or File submitted to Bank is the legal equivalent of the Eligible Item for all purposes, including that Bank qualifies as a holder-in-due-course for the Image under the Uniform Commercial Code. (iv) Notwithstanding anything to the contrary, Bank reserves the right, in its reasonable discretion, to reject or deny, for any reason and without liability, the processing of any Check or Image scanned or deposited using the RDC Services even where Bank has provided Client with a confirmation notice. If an Image does not comply with the requirements set forth in this Section (c) (Image Requirements) and Bank’s processing requirements, Bank may, in its reasonable discretion and without liability, process the Image as received for payment, correct the Image or its accompanying data and process the corrected Image for payment, process the deposit for payment in another format as allowed or chargeback (debit) the Account, or the Client’s Reserve Account established under the Agreement for the amount of the Image. In addition, Bank reserves the right to chargeback (or debit) the Account or Reserve Account for the amount of any item, an Image or any paper item or other electronic representation of an item that is rejected by Bank for any reason, including where Bank, in its reasonable determination, the Eligible Item, Image or any paper item has been previously submitted or deposited with Bank or with anyone else or is returned to Bank. This is true even if there has been made any withdrawals against it. Bank shall not be liable for any losses, costs or fees Client may incur as a result of a chargeback of an ineligible item. (v) Bank may supplement the requirements of this Section (c) (Image Requirements) at any time by providing written notice to Client.