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Can you summarize Tex. Bus. & Com. Section 4.403?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER > CUSTOMER'S RIGHT TO STOP PAYMENT; BURDEN OF PROOF OF LOSS.
Short Summary
This provision, found in the Texas Business and Commerce Code under the Uniform Commercial Code, governs the rights of customers and persons authorized to draw on the account regarding stopping payment of items drawn on the customer’s account or closing the account. A customer or authorized person may stop payment or close the account by providing an order to the bank that describes the item or account with reasonable certainty. The stop-payment order is effective for six months and can be renewed for additional six-month periods. If an item is paid contrary to a stop-payment order, the burden of establishing the fact and amount of loss resulting from the payment is on the customer. The loss may include damages for dishonor of subsequent items. This provision does not specify any penalties for non-compliance.
Whom does it apply to?
Customers and persons authorized to draw on the account
What does it govern?
Relationship between payor bank and its customer
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Texas