§ 4403 — Right of customer to stop payment; burden of proof of loss

(a) Right of customer to stop payment.--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 4303 (relating to when items subject to notice, stop-payment order, legal process or set-off; order in which items may be charged or certified). 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) Duration of stop-payment orders.--A stop-payment order is effective for six 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) Burden of proof of loss.--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 under section 4402 (relating to liability of bank to customer for wrongful dishonor; time of determining insufficiency of account).

Legislative History

(July 9, 1992, P.L.507, No.97, eff. one year) Cross References.Section 4403 is referred to in sections 3418, 4401 of this title.