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Can you summarize 12A OKST 4-401?
Relationship Between Payor Bank and Its Customer > When Bank May Charge Customer's Account
Short Summary
This legal document governs the relationship between a payor bank and its customer regarding the charging of the customer’s account. According to the document, a bank may charge against the customer’s account for an item that is properly payable, even if it creates an overdraft. An item is considered properly payable if it is authorized by the customer and in accordance with any agreement between the customer and the bank. The customer is not liable for the amount of an overdraft if they neither signed the item nor benefited from its proceeds. The bank may also charge against the customer’s account for a check that is otherwise properly payable, even if payment was made before the date of the check, unless the customer has given notice to the bank of the postdating. If the bank charges against the account before the date stated in the notice, it may be liable for damages. The document also addresses the bank’s authority to charge the customer’s account based on the original or completed terms of an altered item, as well as the statute of limitations on a customer’s claim regarding forged or unauthorized endorsements. Overall, this document provides guidelines for when a bank may charge a customer’s account and the liabilities associated with such actions.
Whom does it apply to?
Customers and banks
What does it govern?
Bank Deposits and Collections
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
The bank may be liable for damages for the loss resulting from charging a check before the date stated in the notice of postdating.
Jurisdiction
Oklahoma