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Can you summarize SCCL 36-4-401?
Relationship Between Payor Bank and Its Customer > When bank may charge customer's account.
Short Summary
This legal document, part of the South Carolina Code of Laws, specifically the Commercial Code - Bank Deposits and Collections, governs the relationship between a payor bank and its customer. According to this document, a bank has the authority to charge a 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 complies 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. Additionally, the bank may charge a check against the customer’s account, even if payment was made before the date of the check, unless the customer has given notice of postdating. If the bank charges the account before the stated date, it is 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, unless the bank has notice of improper completion. Overall, this document establishes the rights and responsibilities of both the bank and the customer in relation to account charges and transactions.
Whom does it apply to?
Customers and banks
What does it govern?
Relationship between Payor Bank and Its Customer
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
Damages for dishonor of subsequent items under Section 36-4-402
Jurisdiction
South Carolina