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  • PART 4
    Relationship Between Payor Bank and Its Customer
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  • SECTION 4-402
    Bank's Liability to Customer for Wrongful Dishonor
    • This entry was published on 2014-09-22
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    SECTION 4-401

    When Bank May Charge Customer's Account

    Uniform Commercial Code (UCC) CHAPTER 38, ARTICLE 4, PART 4

    Section 4--401. When Bank May Charge Customer's Account.

    (1) As against its customer, a bank may charge against his account any
    item which is otherwise properly payable from that account even though
    the charge creates an overdraft.

    (2) A bank which in good faith makes payment to a holder may charge
    the indicated account of its customer according to

    (a) the original tenor of his altered item; or

    (b) the tenor of his completed item, even though the bank knows

    the item has been completed unless the bank has notice that

    the completion was improper.