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Can you summarize IC 26-1-4-403?
Bank Deposits and Collections > Customer's right to stop payment; burden of proof of loss
Short Summary
This section of the Indiana Code, specifically under the Commercial Law and Uniform Commercial Code, governs the customer’s right to stop payment of any item drawn on their account or close the account. The customer or any person authorized to draw on the account can issue an order to the bank to stop payment or close the account, provided that the bank is given a reasonable opportunity to act on it. If more than one person’s signature is required to draw on the account, any of these persons can stop payment or close the account. A stop-payment order is effective for six months, but if the original order was oral and not confirmed in a record within fourteen calendar days, it lapses. 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. No specific exemptions or penalties are mentioned in this section.
Whom does it apply to?
Customers or any person authorized to draw on the account
What does it govern?
Stop payment of any item drawn on the customer's account or close the account
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Indiana