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Can you summarize MICL 440.4401?
PART 4 RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER (440.4401...440.4407) > Payor bank; charge against customer's account.
Short Summary
This legal document, part of the Uniform Commercial Code, governs the relationship between a payor bank and its customer. It outlines the bank’s authority to charge against the customer’s account for items that are properly payable, even if it creates an overdraft. An item is considered properly payable if it 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 allows a bank to charge against the customer’s account for a check that is otherwise properly payable, 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. The document also addresses the bank’s ability to charge the customer’s account based on the original or completed terms of an altered item, as long as the bank does not have notice of improper completion. No specific exemptions or penalties are 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?
No penalties are mentioned.
Jurisdiction
Michigan