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Can you summarize MNST 336.4-401?
UNIFORM COMMERCIAL CODE > WHEN BANK MAY CHARGE CUSTOMER'S ACCOUNT.
Short Summary
This legal document, part of the Minnesota Statutes under the Uniform Commercial Code, governs the charging of a customer’s account by a bank. It states that a bank may 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 in accordance with any agreement between the customer and the bank. The document also specifies 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 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 customer’s 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. Overall, this document establishes the rules and liabilities surrounding the charging of a customer’s account by a bank in Minnesota.
Whom does it apply to?
Banks and their customers
What does it govern?
Charging a customer's account, liability for overdrafts, postdated checks, and payment to a holder
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
The bank may be liable for damages for charging a check before the date stated in a notice of postdating.
Jurisdiction
Minnesota