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Can you summarize NERS Uniform Commercial Code 4-401?
When bank may charge customer's account.
Short Summary
This legal document governs the ability of a bank to charge a customer’s account. According to the document, a bank may charge against the account of a customer for an item that is properly payable from that account, 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 neither signed the item nor benefited from its proceeds. Additionally, the document allows a bank to charge a check from a customer’s account, even if payment was made before the date of the check, unless the customer has given notice to the bank of the postdating. If a bank charges against the account before the date stated in the notice, the bank is liable for damages. The document also mentions that a bank that makes payment to a holder in good faith may charge the customer’s account according to the original terms of an altered item or the terms of a completed item, unless the bank has notice of improper completion. Overall, this document provides guidelines for when a bank may charge a customer’s account and outlines the liabilities and responsibilities of both parties involved.
Whom does it apply to?
Banks and their customers
What does it govern?
Charging a customer's account by a bank
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
The bank is liable for damages for charging a check before the date stated in the notice of postdating.
Jurisdiction
Nebraska