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Can you summarize MGL Chapter 106, Article 4, Section 4-403?
BANK DEPOSITS AND COLLECTIONS > Customer's Right to Stop Payment; Burden of Proof of Loss
Short Summary
This section of the Massachusetts General Law, specifically under the Uniform Commercial Code for Bank Deposits and Collections, governs the right of a customer or any authorized person to stop payment of any item drawn on the customer’s account or close the account. The customer or authorized person must provide an order to the bank with a clear description of the item or account, allowing the bank a reasonable opportunity to act on it. If multiple signatures are required to draw on the account, any of these persons may 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 writing within 14 calendar days, it lapses. The customer has the burden of proving any loss resulting from the payment of an item contrary to a stop-payment order or order to close an account. This loss may include damages for dishonor of subsequent items. No specific 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 items drawn on a customer's account or closing the account
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Massachusetts