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Can you summarize FLCL 674.401?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER (ss. 674.401-674.407) > When bank may charge customers account.
Short Summary
This legal document, found in the Florida Statutes under the Uniform Commercial Code, specifically addresses the relationship between a payor bank and its customer regarding bank deposits and collections. According to this document, a bank has the authority to charge a customer’s account for an item that is properly payable from that account, 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. However, a customer is not liable for an overdraft if they did not sign the item or benefit from its proceeds. The document also states that a bank can charge a customer’s account for a check that is otherwise properly payable, even if payment was made before the date of the check, unless the customer has given notice of postdating. If a bank charges against the customer’s account before the date stated in the notice, the bank may be held liable for damages. Additionally, the document outlines the bank’s rights and responsibilities when dealing with altered or completed items. It is important for banks and their customers to understand these provisions to ensure compliance and avoid potential legal issues.
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?
The bank may be liable for damages if it charges against the customer's account before the date stated in the notice of postdating.
Jurisdiction
Florida