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Can you summarize MSCO 75-4-404?
Relationship Between Payor Bank and Its Customer. > Bank not obligated to pay check more than six (6) months old.
Short Summary
According to Mississippi Code 1972, specifically the Uniform Commercial CodeBank Deposits and Collections, a bank is not obligated to pay a check presented more than six (6) months after its date, except for certified checks. However, the bank may charge the customer’s account for payment made in good faith after the six-month period. This provision aims to protect banks from the obligation to honor stale checks while still requiring them to exercise ordinary care in their dealings with customers. The code also references other sections related to the certification of checks and the obligations of the check’s maker, drawer, or acceptor. Judicial decisions have clarified that a bank must demonstrate the exercise of the requisite degree of care towards its customer when its actions are in question. Overall, this provision establishes the time limit for a bank’s obligation to pay a check and the conditions under which it can charge the customer’s account for payment made after the six-month period.
Whom does it apply to?
Banks and their customers
What does it govern?
Obligation of a bank to pay a check presented more than six (6) months after its date
What are exemptions?
Certified checks
What are the Penalties?
No penalties mentioned.
Jurisdiction
Mississippi