(a) A bank may charge against the account of a customer an item that is properly payable
from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in accordance
with any agreement between the customer and bank.
(b) A customer is not liable for the amount of an overdraft if the customer neither
signed the item nor benefited from the proceeds of the item.
(c) A bank may charge against the account of a customer a check that is otherwise
properly payable from the account, even though payment was made before the date of
the check, unless the customer has given notice to the bank of the postdating describing
the check with reasonable certainty. The notice is effective for the period stated in section 4-4-403(b) for stop-payment orders, and must be received at such time and in such manner as
to afford the bank reasonable opportunity to act on it before the bank takes any action
with respect to the check described in section 4-4-303. If a bank charges against the account of a customer a check before the date stated
in the notice of postdating, the bank is liable for damages for the loss resulting
from its act. The loss may include damages for dishonor of subsequent items under section 4-4-402.
(d) A bank that in good faith makes payment to a holder may charge the indicated account
of its customer according to:
(1) The original terms of the altered item; or
(2) The terms of the completed item, even though the bank knows the item has been
completed unless the bank has notice that the completion was improper.
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
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