§ 4-4-401 — When bank may charge customer's account

Colorado § 4-4-401

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Bank Deposits and Collections

Text

(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 is
effective for the period stated in section 4-4-403 (b) for stop-payment orders, and
must be received at such time and in such manner as to afford the bank reasonable
opportunity to act on it before the bank takes any action with respect to the check
described in section 4-4-303. 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 4-4-402.

(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.

Legislative History

Source: L. 94: Entire article amended with relocations, p. 899, � 2, effective January 1, 1995.