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Can you summarize 810 ILCS 5/4-403?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER >
Short Summary
This section of the Illinois Compiled Statutes, specifically the Uniform Commercial Code, governs the relationship between a payor bank and its customer in the context of bank deposits and collections. It grants the customer the right to stop payment of any item drawn on their account or close the account by providing an order to the bank. The stop-payment order is effective for 6 months, but lapses after 14 calendar days if the original order was oral and not confirmed in writing. The burden of proof of loss resulting from the payment of an item contrary to a stop payment order or order to close an account lies with the customer. The section also outlines the customer’s responsibility to examine bank statements and promptly notify the bank of any items improperly paid over a properly lodged stop payment order. Failure to notify the bank within one year of receipt of the improperly paid item or a statement containing the debit entry for said item will preclude the customer from asserting against the bank the improper payment.
Whom does it apply to?
Customers and persons authorized to draw on the account
What does it govern?
Relationship between payor bank and its customer
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Illinois