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Can you summarize KSST 84-4-401?
BANK DEPOSITS AND COLLECTIONS > When bank may charge customer's account.
Short Summary
This provision, found in the Kansas Statutes under the Uniform Commercial Code, governs the circumstances under which a bank may charge a customer’s account. According to the provision, a bank is allowed to charge against the customer’s account for an item that is properly payable, 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 provision also states that a customer is not liable for an overdraft if they did not sign the item or benefit from its proceeds. Additionally, the provision allows a bank to charge against the 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 account before the date stated in the notice, the bank may be liable for damages. Overall, this provision clarifies the circumstances under which a bank may charge a customer’s account and outlines the customer’s liability in case of an overdraft.
Whom does it apply to?
Banks and their customers
What does it govern?
Charging a customer's account by a bank
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
The bank may be liable for damages if it charges against the account before the date stated in the notice of postdating.
Jurisdiction
Kansas