§ 25-4-401. When bank may charge customer's account. - North Carolina Statutes

Part 4.

RELATIONSHIP BETWEEN PAYOR BANKAND ITS CUSTOMER.

§ 25‑4‑401.  Whenbank may charge customer's account.

(a)        A bank may chargeagainst the account of a customer an item that is properly payable from thataccount even though the charge creates an overdraft. An item is properlypayable if it is authorized by the customer and is in accordance with anyagreement between the customer and bank.

(b)        A customer is notliable for the amount of an overdraft if the customer neither signed the itemnor benefited from the proceeds of the item.

(c)        A bank may chargeagainst the account of a customer a check that is otherwise properly payablefrom 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 describingthe check with reasonable certainty. The notice is effective for the periodstated in G.S. 25‑4‑403(b) for stop‑payment orders, and mustbe received at a time and in a manner that afforded the bank a reasonableopportunity to act on it before the bank takes any action with respect to thecheck described in G.S. 25‑4‑303. If a bank charges against theaccount of a customer a check before the date stated in the notice ofpostdating, the bank is liable for damages for the loss resulting from its act.The loss may include damages for dishonor of subsequent items under G.S. 25‑4‑402.

(d)        A bank that in goodfaith makes payment to a holder may charge the indicated account of itscustomer according to:

(1)        The original termsof the altered item; or

(2)        The terms of thecompleted item, even though the bank knows the item has been completed unlessthe bank has notice that the completion was improper. (1965,c. 700, s. 1; 1995, c. 232, s. 2.)