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Can you summarize HIRS 490:4-401?
Relationship Between Payor Bank and its Customer > When bank may charge customer's account.
Short Summary
This legal document, found in the Hawaii Revised Statutes, specifically in the Uniform Commercial Code under the section on Bank Deposits and Collections, governs the relationship between a payor bank and its customer. 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. The customer is not liable for an overdraft if they did not sign the item or benefit from its proceeds. Additionally, the bank may 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 the check. If the bank charges the account before the stated date, it is liable for damages. The document also addresses the bank’s liability when making payment to a holder of an altered or completed item. 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 490:4-402
Jurisdiction
Hawaii