Ask Reggi Your Question Now
Can you summarize 9A VTST 4-401?
BANK DEPOSITS AND COLLECTIONS > When bank may charge customer's account
Short Summary
This legal document, part of the Vermont Statutes Uniform Commercial Code, governs bank deposits and collections. It outlines the circumstances under which a bank may charge a customer’s account. A bank is allowed to charge against the customer’s account for items that are properly payable, authorized by the customer, and in accordance with any agreement between the customer and the bank. The customer is not liable for overdrafts if they did not sign the item or benefit from its proceeds. The bank may also charge a check that is properly payable from the account, even if payment was made before the date of the check, unless the customer has given notice of postdating. If the bank charges a check before the date stated in the notice, it is liable for damages. Additionally, the document specifies that a bank that makes payment to a holder in good faith may charge the customer’s account according to the original or completed terms of the item, unless it has notice of improper completion. The document does not mention any specific exemptions. Non-compliance with the provisions may result in damages for dishonor of subsequent items under section 4-402 of this title.
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?
Damages for dishonor of subsequent items under section 4-402 of this title.
Jurisdiction
Vermont