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Can you summarize MSCO 75-4-401?
Relationship Between Payor Bank and Its Customer. > When bank may charge customers account.
Short Summary
This legal document, part of the Mississippi Code 1972, specifically falls under the Uniform Commercial CodeBank Deposits and Collections. It governs the relationship between a payor bank and its customer regarding the charging of the customer’s account. According to the document, a bank may charge a customer’s account for an item that is properly payable, even if it creates an overdraft. The item must be authorized by the customer and in accordance with any agreement between the customer and the bank. The customer is not liable for an overdraft if they did not sign the item or benefit from its proceeds. The bank may also 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 the bank charges a check before the date stated in the notice, it is liable for damages. The document also covers the bank’s authority to charge the customer’s account based on the original terms or completed terms of altered items, as long as the bank is acting in good faith. Overall, this document provides guidelines for when and how a bank may charge a customer’s account.
Whom does it apply to?
Banks and their customers
What does it govern?
Charging customer's account, overdraft, postdating checks, altered items, completed items
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
The bank is liable for damages for the loss resulting from charging a check before the date stated in the notice of postdating.
Jurisdiction
Mississippi