AI-assisted research summary: A bank may charge a customer’s account for properly payable items, including certain overdrafts and some checks paid before their date, subject to notice of postdating and good-faith rules for altered or completed items.
PART 4. RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMERS §4-401. When bank may charge customer's account (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) (Reserved) (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 R.S. 10:4-403(b) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in R.S. 10:4-303. 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 proximately caused by its act. Such liability may include damages for dishonor of subsequent items under R.S. 10:4-402. (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. Acts 1992, No. 1133, §4, eff. July 1, 1993. Amended by Acts 1993, No. 948, §3, eff. Jan. 1, 1994.