PART 4. 
RELATIONSHIP BETWEEN PAYOR



BANK AND
ITS CUSTOMER



 



§490:4-401  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)  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 will be effective for the period stated in section
490:4-403(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 section
490:4-303.  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 490:4-402.



(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. [L 1965, c 208, §4-401; HRS §490:4-401; am L 1991, c
118, pt of §4]



 



Case Notes



 



  Overdraft as constituting authorization to pay amount and to
charge account of drawer.  52 H. 51, 469 P.2d 816.