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Can you summarize MDCM Com. Law Section 4-401?
Short Summary
This legal document, found in the Code of Maryland under Commercial Law, Title 4, SubTitle 4, governs various aspects related to banking transactions. It allows banks to charge items against a customer’s account, even if it creates an overdraft, as long as the item is authorized by the customer and in accordance with any agreement between the customer and the bank. The document also states that a customer is not liable for an overdraft if they did not sign the item or benefit from its proceeds. Additionally, it permits banks to charge a check against a 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 a postdated check before the stated date, the bank may be liable for damages. Furthermore, the document outlines the rules for banks making payment to a holder of an altered or completed item in good faith. The bank may charge the customer’s account based on the original terms of the altered item or the terms of the completed item, unless the bank has notice of improper completion. Overall, this document establishes the rights and responsibilities of banks and their customers in relation to various types of transactions.
Whom does it apply to?
Banks and their customers
What does it govern?
Charging items against a customer's account, liability for overdrafts, postdated checks, and payment of altered or completed items
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
Banks may be liable for damages for charging a postdated check before the date stated in the notice of postdating.
Jurisdiction
Maryland