# Title 6 — Banks and Banking

## Chapter 6-08.6 — Uniform Special Deposits Act

### § 6-08.6-01. Definitions.

In this chapter:
1. "Account agreement" means an agreement that:
a. Is in a record between a bank or credit union and one or more depositors;
b. May have one or more beneficiaries as additional parties; and
c. States the intention of the parties to establish a special deposit in accordance
with this chapter.
2. "Bank" means a trust company or a person engaged in the business of banking as
defined in section 6-01-02.
3. "Beneficiary" means a person that:
a. Is identified as a beneficiary in an account agreement; or
b. If not identified as a beneficiary in an account agreement, may be entitled to
payment from a special deposit:
(1) Under the account agreement; or
(2) On termination of the special deposit.
4. "Contingency" means an event or circumstance stated in an account agreement which
is not certain to occur but must occur before the bank or credit union is obligated to
pay a beneficiary.
5. "Creditor process" means attachment, garnishment, levy, notice of lien, sequestration,
or similar process issued by or on behalf of a creditor or other claimant.
6. "Depositor" means a person that establishes or funds a special deposit.
7. "Good faith" means honesty in fact and observance of reasonable commercial
standards of fair dealing.
8. "Knowledge" of a fact means:
a. With respect to a beneficiary, actual knowledge of the fact; or
b. With respect to a bank or credit union holding a special deposit:
(1) If the bank or credit union:
(a) Has established a reasonable routine for communicating material
information to an individual to whom the bank or credit union has
assigned responsibility for the special deposit; and
(b) Maintains reasonable compliance with the routine, actual knowledge
of the fact by that individual; or
(2) If the bank or credit union has not established and maintained reasonable
compliance with a routine described in paragraph 1 or otherwise exercised
due diligence, implied knowledge of the fact that would have come to the
attention of an individual to whom the bank or credit union has assigned
responsibility for the special deposit.
9. "Obligated to pay a beneficiary" or "obligation to pay a beneficiary" means a
beneficiary is entitled under the account agreement to receive from the bank or credit
union a payment when:
a. A contingency has occurred; and
b. The bank or credit union has knowledge the contingency has occurred.
10. "Permissible purpose" means a governmental, regulatory, commercial, charitable, or
testamentary objective of the parties stated in an account agreement. The term
includes an objective to:
a. Hold funds:
(1) In escrow, including for a purchase and sale, lease, buyback, or other
transaction;
(2) As a security deposit of a tenant;
(3) That may be distributed to a person as remuneration, retirement or other
benefit, or compensation under a judgment, consent decree, court order, or
other decision of a tribunal; or

(4) For distribution to a defined class of persons after identification of the class
members and their interest in the funds;
b. Provide assurance with respect to an obligation created by contract, including
earnest money to ensure a transaction closes;
c. Settle an obligation that arises in the operation of a payment system, securities
settlement system, or other financial market infrastructure;
d. Provide assurance with respect to an obligation that arises in the operation of a
payment system, securities settlement system, or other financial market
infrastructure; or
e. Hold margin, other cash collateral, or funds that support the orderly functioning of
financial market infrastructure or the performance of an obligation with respect to
the infrastructure.
11. "Person" means an individual, estate, business or nonprofit entity, government or
governmental subdivision, agency, or instrumentality, or other legal entity. The term
includes a protected series, however denominated, of an entity if the protected series
is established under law that limits, or limits if conditions specified under law are
satisfied, the ability of a creditor of the entity or of any other protected series of the
entity to satisfy a claim from assets of the protected series.
12. "Record" means information:
a. Inscribed on a tangible medium; or
b. Stored in an electronic or other medium and retrievable in perceivable form.
13. "Special deposit" means a deposit that satisfies section 6-08.6-04.
14. "State" means a state of the United States, the District of Columbia, Puerto Rico, the
United States Virgin Islands, or any other territory or possession subject to the
jurisdiction of the United States. The term includes an agency or instrumentality of the
state.
### § 6-08.6-02. Scope - Choice of law - Forum.

1. This chapter applies to a special deposit under an account agreement that states the
intention of the parties to establish a special deposit governed by this chapter,
regardless of whether a party to the account agreement or a transaction related to the
special deposit, or the special deposit itself, has a reasonable relation to this state.
2. The parties to an account agreement may choose a forum in this state for settling a
dispute arising out of the special deposit, regardless of whether a party to the account
agreement or a transaction related to the special deposit, or the special deposit itself,
has a reasonable relation to this state.
3. This chapter does not affect:
a. A right or obligation relating to a deposit other than a special deposit under this
chapter; or
b. The voidability of a deposit or transfer that is fraudulent or voidable under other
law.
### § 6-08.6-03. Variation by agreement or amendment.

1. The effect of sections 6-08.6-01 through 6-08.6-05, 6-08.6-07 through 6-08.6-10, and
Subject to subsection2, the effect of sections 6-08.6-06, 6-08.6-11, and 6-08.6-12 may
be varied by agreement.
2. A provision in an account agreement or other record that substantially excuses liability
or substantially limits remedies for failure to perform an obligation under this chapter is
not sufficient to vary the effect of a provision of this chapter.
3. If a beneficiary is a party to an account agreement, the bank or credit union and the
depositor may amend the agreement without the consent of the beneficiary only if the
agreement expressly permits the amendment.
4. If a beneficiary is not a party to an account agreement and the bank or credit union
and the depositor know the beneficiary has knowledge of the agreement's terms, the
bank or credit union and the depositor may amend the agreement without the consent

of the beneficiary only if the amendment does not adversely and materially affect a
payment right of the beneficiary.
5. If a beneficiary is not a party to an account agreement and the bank or credit union
and the depositor do not know whether the beneficiary has knowledge of the
agreement's terms, the bank or credit union and the depositor may amend the
agreement without the consent of the beneficiary only if the amendment is made in
good faith.
### § 6-08.6-04. Requirements for special deposit.

A deposit is a special deposit if it is:
1. A deposit of funds in a bank or credit union under an account agreement;
2. For the benefit of at least two beneficiaries, one or more of which may be a depositor;
3. Denominated in a medium of exchange that is currently authorized or adopted by a
domestic or foreign government;
4. For a permissible purpose stated in the account agreement; and
5. Subject to a contingency.
### § 6-08.6-05. Permissible purpose.

1. A special deposit must serve at least one permissible purpose stated in the account
agreement from the time the special deposit is created in the account agreement until
termination of the special deposit.
2. If, before termination of the special deposit, the bank or credit union or a court
determines the special deposit no longer satisfies subsection 1, sections 6-08.6-07
through 6-08.6-10 cease to apply to any funds deposited in the special deposit after
the special deposit ceases to satisfy subsection 1.
3. If, before termination of a special deposit, the bank or credit union determines the
special deposit no longer satisfies subsection 1, the bank or credit union may take
action the bank or credit union believes is necessary under the circumstances,
including terminating the special deposit.
### § 6-08.6-06. Payment to beneficiary by bank or credit union.

1. Unless the account agreement provides otherwise, the bank or credit union is
obligated to pay a beneficiary if there are sufficient actually and finally collected funds
in the balance of the special deposit.
2. Except as provided in subsection 3, the obligation to pay the beneficiary is excused if
the funds available in the special deposit are insufficient to cover the payment.
3. Unless the account agreement provides otherwise, if the funds available in the special
deposit are insufficient to cover an obligation to pay a beneficiary, a beneficiary may
elect to be paid the funds that are available or, if there is more than one beneficiary, a
pro rata share of the funds available. Payment to the beneficiary making the election
under this subsection discharges the bank's or credit union's obligation to pay a
beneficiary and does not constitute an accord and satisfaction with respect to another
person obligated to the beneficiary.
4. Unless the account agreement provides otherwise, the obligation of the bank or credit
union obligated to pay a beneficiary is immediately due and payable.
5. The bank or credit union may discharge the bank's or credit union's obligation under
this section by:
a. Crediting another transaction account of the beneficiary; or
b. Taking other action that:
(1) Is allowed under the account agreement for the bank or credit union to
obtain a discharge; or
(2) Otherwise would constitute a discharge under law.
6. If the bank or credit union obligated to pay a beneficiary has incurred an obligation to
discharge the obligation of another person, the obligation of the other person is
discharged if action by the bank or credit union under subsection 5 would constitute a

discharge of the obligation of the other person under law that determines whether an
obligation is satisfied.
### § 6-08.6-07. Property interest of depositor or beneficiary.

1. A depositor or a beneficiary does not have a property interest in the special deposit
itself.
2. The only property interest with respect to a special deposit is the right to receive
payment if the bank or credit union is obligated to pay a beneficiary. Any property
interest under this subsection is determined under other law.
### § 6-08.6-08. When creditor process is enforceable against bank or credit union.

1. Subject to subsection 2, creditor process with respect to a special deposit is not
enforceable against the bank or credit union holding the special deposit.
2. Creditor process is enforceable against the bank or credit union holding a special
deposit with respect to an amount the bank or credit union is obligated to pay a
beneficiary or a depositor if the process:
a. Is served on the bank or credit union;
b. Provides sufficient information to allow the bank or credit union to identify the
depositor or the beneficiary from the bank's or credit union's books and records;
and
c. Gives the bank or credit union a reasonable opportunity to act on the process.
3. Creditor process served on a bank or credit union before it is enforceable against the
bank or credit union under subsection 2 does not create a right of the creditor against
the bank or credit union or a duty of the bank or credit union to the creditor. Other law
determines whether creditor process creates a lien enforceable against the beneficiary
on a contingent interest of a beneficiary, including a depositor as a beneficiary, even if
not enforceable against the bank or credit union.
### § 6-08.6-09. Injunction or similar relief.

A court may enjoin, or grant similar relief that would have the effect of enjoining, a bank or
credit union from paying a depositor or beneficiary only if payment would constitute a material
fraud or facilitate a material fraud with respect to a special deposit.
### § 6-08.6-10. Recoupment or set off.

1. Except as provided in subsection 2 or 3, a bank or credit union may not exercise a
right of recoupment or set off against a special deposit.
2. An account agreement may allow the bank or credit union to debit the special deposit:
a. When the bank or credit union becomes obligated to pay a beneficiary, in an
amount that does not exceed the amount necessary to discharge the obligation;
b. For a fee assessed by the bank or credit union that relates to an overdraft in the
special deposit account;
c. For costs incurred by the bank or credit union that relate directly to the special
deposit; or
d. To reverse an earlier credit posted by the bank or credit union to the balance of
the special deposit account, if the reversal occurs under an event or circumstance
warranted under other law governing mistake and restitution.
3. The bank or credit union holding a special deposit may exercise a right of recoupment
or set off against an obligation to pay a beneficiary, even if the bank or credit union
funds payment from the special deposit.
### § 6-08.6-11. Duties and liability of bank or credit union.

1. A bank or credit union does not have a fiduciary duty to any person with respect to a
special deposit.

2. When the bank or credit union holding a special deposit becomes obligated to pay a
beneficiary, a debtor-creditor relationship arises between the bank or credit union and
beneficiary.
3. The bank or credit union holding a special deposit has a duty to a beneficiary to
comply with the account agreement and this chapter.
4. If the bank or credit union holding a special deposit does not comply with the account
agreement or this chapter, the bank or credit union is liable to a depositor or
beneficiary only for damages proximately caused by the noncompliance. Except as
provided by other law, the bank or credit union is not liable for consequential, special,
or exemplary damages.
5. The bank or credit union holding a special deposit may rely on records presented in
compliance with the account agreement to determine whether the bank or credit union
is obligated to pay a beneficiary.
6. If the account agreement requires payment on presentation of a record, the bank or
credit union shall determine within a reasonable time whether the record is sufficient to
require payment. If the agreement requires action by the bank or credit union on
presentation of a record, the bank or credit union is not liable for relying in good faith
on the genuineness of the record if the record appears on its face to be genuine.
7. Unless the account agreement provides otherwise, the bank or credit union is not
required to determine whether a permissible purpose stated in the agreement
continues to exist.
### § 6-08.6-12. Term and termination.

1. Unless otherwise provided in the account agreement, a special deposit terminates five
years after the date the special deposit was first funded.
2. Unless otherwise provided in the account agreement, if the bank or credit union cannot
identify or locate a beneficiary entitled to payment when the special deposit is
terminated, and a balance remains in the special deposit, the bank or credit union shall
pay the balance to the depositor as a beneficiary.
3. A bank or credit union that pays the remaining balance as provided under subsection 2
has no further obligation with respect to the special deposit.
### § 6-08.6-13. Principles of law and equity.

Title 41, consumer protection law, law governing deposits generally, law related to escheat
and abandoned or unclaimed property, and the principles of law and equity, including law related
to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress,
coercion, mistake, and bankruptcy, supplement this chapter except to the extent inconsistent
with this chapter.
### § 6-08.6-14. Uniformity of application and construction.

In applying and construing this chapter, a court shall consider the promotion of uniformity of
the law among the states that enact it.
