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Can you summarize 42a CTGS Article 4, Section 401?
Bank Deposits and Collections - Secs. 42a-4-101 to 42a-4-504 > When bank may charge customer's account.
Short Summary
This legal document, found in the General Statutes of Connecticut under the Uniform Commercial Code - Articles 1 to 10, specifically in the section on Bank Deposits and Collections, governs the charging of a customer’s account by a bank. According to the document, a bank may charge against the customer’s account for items that are properly payable, even if it creates an overdraft. The item must be authorized by the customer and in accordance with any agreement between the customer and the bank. However, the customer is not liable for the amount of an overdraft if they neither signed the item nor benefited from its proceeds. The document also addresses the payment of postdated checks, stating that a bank may charge against the customer’s account for a check that is otherwise properly payable, unless the customer has given notice of postdating. If a bank charges against the account before the date stated in the notice, the bank is liable for damages. Additionally, the document discusses the bank’s ability to charge the customer’s account based on the original terms of an altered item or the terms of a completed item, as long as the bank is not aware of any improper completion. 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?
Banks and their customers
What does it govern?
Charging customer's account for properly payable items, liability for overdrafts, payment of postdated checks, and payment according to altered or completed items
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
Banks may be liable for damages for charging a postdated check before the date stated in the notice of postdating.
Jurisdiction
Connecticut