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Can you summarize ALCA 7-4-403?
Relationship Between Payor Bank and Its Customer. > Customer's right to stop payment; burden of proof of loss.
Short Summary
This legal document, part of the Code of Alabama’s Commercial Code, governs the relationship between a payor bank and its customer in the context of bank deposits and collections. It grants the customer or any authorized person the right to stop payment of any item drawn on the customer’s account or close the account by providing an order to the bank. The stop-payment order is effective for six months, but lapses after 14 calendar days if the original order was oral and not confirmed in writing. The customer bears the burden of proving the fact and amount of loss resulting from the payment of an item contrary to a stop-payment order or order to close an account. The loss may include damages for dishonor of subsequent items. This document does not specify any penalties or exemptions.
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 penalties are mentioned.
Jurisdiction
Alabama