§ 4-403 — Customer's right to stop payment; burden of proof of loss

Illinois § 4-403

• Jurisdiction: Illinois
• Topic: BUSINESS AND EMPLOYMENT
• Ch. 810: COMMERCIAL CODE
• Act 810 ILCS 5/: Uniform Commercial Code.
• Art.: Article 4 - Bank Deposits And Collections

Text

(a) A customer or any person authorized to draw on the account if there is more than one person may stop payment of any item drawn on the customer's account or close the account by an order to the bank describing the item or account with reasonable certainty received at a time and in a manner that affords the bank a reasonable opportunity to act on it before any action by the bank with respect to the item described in Section 4-303. If the signature of more than one person is required to draw on an account, any of these persons may stop payment or close the account. (b) A stop-payment order is effective for 6 months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in writing within that period. A stop-payment order may be renewed for additional six-month periods by a writing given to the bank within a period during which the stop-payment order is effective. (c) The burden of establishing the fact and amount of loss resulting from the payment of an item contrary to a stop payment order or order to close an account is on the customer. The loss from payment of an item contrary to a stop payment order may include damages for dishonor of subsequent items pursuant to Section 4-402. (d) When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement of account and items pursuant to a request or instructions of its customer or otherwise in a reasonable manner makes the statement and items available to the customer or, in lieu of returning such items, sends its customer a statement of account which includes the identifying number of each item paid in good faith or otherwise specifically identifying such items or holds such statement pursuant to a request or instructions of its customer or otherwise in a reasonable manner makes such statement available to the customer, the customer must exercise reasonable care and promptness to examine the items and statement to discover any items improperly paid by the bank over the customer's properly lodged stop payment order and must notify the bank promptly after discovery thereof. Failure of the customer to notify the bank within one year of either receipt of the item improperly paid by the bank over a properly lodged stop payment order or, in lieu of receipt of the improperly paid item, receipt of a statement containing the debit entry for said item and specifically identifying said item shall preclude the customer from asserting against the bank the improper payment.

Legislative History

(Source: P.A. 86-583; 87-582; 87-1135.)