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Can you summarize Com Code CACL 4401?
Relationship Between Payor Bank and Its Customer [4401. - 4407.] >
Short Summary
This legal document, part of the California Commercial Code, governs the relationship between a payor bank and its customer. It outlines the bank’s authority to charge the customer’s account for properly payable items, 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 neither signed the item nor benefited from its proceeds. Additionally, it allows a bank to charge a check from the customer’s account, even if payment was made before the date of the check, unless the customer has given notice of postdating. If a bank charges a check before the date stated in the notice, it is liable for damages. The document further addresses the bank’s ability to charge the customer’s account based on the original or completed terms of an altered item, unless the bank has notice of improper completion. Overall, this document establishes the rights and responsibilities of banks and their customers in relation to account charges and check payments.
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?
Damages for dishonor of subsequent items under Section 4402
Jurisdiction
California