400.4-401. When bank may charge customer's account.

MISSOURI STATUTES AND CODES

400.4-401. When bank may charge customer's account.

When bank may charge customer's account.

400.4-401. (a) A bank may charge against the account of acustomer an item that is properly payable from that account eventhough the charge creates an overdraft. An item is properlypayable if it is authorized by the customer and is in accordancewith any agreement between the customer and bank.

(b) A bank may charge against the account of a customer acheck that is otherwise properly payable from the account, eventhough payment was made before the date of the check, unless thecustomer has given notice to the bank of the postdatingdescribing the check with reasonable certainty. The notice iseffective for the period stated in Section 400.4-403(b) forstop-payment order, and must be received at such time and in suchmanner as to afford the bank a reasonable opportunity to act onit before the bank takes any action with respect to the checkdescribed in Section 400.4-303. If a bank charges against theaccount of a customer a check before the date stated in thenotice of postdating, the bank is liable for damages for the lossresulting from its act. The loss may include damages fordishonor of subsequent items under Section 400.4-402.

(1) the original terms of the altered item; or

(2) the terms of the completed item, even though the bankknows the item has been completed unless the bank has notice thatthe completion was improper.

(d) No bank shall be liable for charging against itscustomer's account a postdated check, otherwise properly payablefrom such account, before the date stated thereon unless the bankhas received written notice in advance from the customer that thecheck is postdated. Such notice shall include the payee's nameas it appeared on the check, the date, the check number and theamount of such check.

(e) No bank customer shall be liable for charges on a checkdishonored because of insufficient funds if the bank was in errorin their accounting or posting of the customer's account and thebank shall also notify, in writing, the persons affected by thebank's failure to honor such checks.