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Can you summarize IDST 28-4-401?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER > WHEN BANK MAY CHARGE CUSTOMERS ACCOUNT.
Short Summary
This legal document, found in the Idaho Statutes under the Commercial Transactions section, specifically deals with the relationship between a payor bank and its customer. According to this document, a bank is allowed 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 check against 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 against the account before the date stated in the notice, the bank may be liable for damages. Additionally, the document outlines that a bank can charge its customer’s account based on the original terms of an altered item or the terms of a completed item, as long as the bank is not aware of any improper completion. There are no specific exemptions mentioned in this document.
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
Idaho