Ask Reggi Your Question Now
Can you summarize 13 PACS 4401?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER > When bank may charge account of customer.
Short Summary
This legal document, found in the Pennsylvania Compiled Statutes under the Commercial Code, specifically addresses the relationship between a payor bank and its customer. According to this document, a bank has the authority to charge against a customer’s account for items that are properly payable from that account, even if it creates an overdraft. An item is considered properly payable if it is authorized by the customer and complies with any agreement between the customer and the bank. The document also states that a customer is not liable for an overdraft if they did not sign the item or benefit from its proceeds. Additionally, the document allows a bank to charge a postdated check against a customer’s account unless the customer has given notice to the bank of the postdating. If a bank charges a check before the date stated in the notice, the bank may be liable for damages. The document also addresses payment to a holder on altered or completed items, stating that a bank can charge the customer’s account based on the original terms of the altered item or the terms of the completed item, unless the bank has notice of improper completion. Overall, this document provides guidelines for when a bank may charge a customer’s account and outlines the customer’s liability in certain situations.
Whom does it apply to?
Banks and their customers
What does it govern?
Relationship between payor bank and its customer
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Pennsylvania