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Can you summarize NJST 12A:4-403?
Customer's right to stop payment; burden of proof of loss
Short Summary
This provision, found in the New Jersey General and Permanent Statutes under the Commercial Transactions section, grants customers or persons authorized to draw on the account the right to stop payment of any item drawn on the customer’s account or close the account. The order to the bank must describe the item or account with reasonable certainty and be received in a timely manner to allow the bank to act on it before taking any action on the item. If multiple signatures are required to draw on the account, any person whose signature is required may stop payment or close the account. A stop-payment order is effective for six months, but if the original order was oral and not confirmed in writing within 14 calendar days, it lapses. The customer bears the burden of proving the fact and amount of loss resulting from payment of an item contrary to a stop-payment order or order to close the account. The loss may include damages for dishonor of subsequent items. No specific penalties are mentioned in this provision.
Whom does it apply to?
Customers or persons authorized to draw on the account
What does it govern?
Stop payment of items drawn on a customer's account and closure of the account
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
New Jersey