Sec. 403. (a) A customer or any person authorized to draw on the account if there is more than one (1) 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 IC 26-1-4-303. If the signature of more than one (1) 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 six (6) months, but it lapses after fourteen (14) calendar days if the original order was oral and was not confirmed in a record within that period. A stop-payment order may be renewed for additional six (6) month periods by a record 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 under IC 26-1-4-402.
Formerly: Acts 1963, c.317, s.4-403. As amended by P.L.152-1986, SEC.225; P.L.222-1993, SEC.38; P.L.135-2009, SEC.20.
Structure Indiana Code
Article 1. Uniform Commercial Code
Chapter 4. Bank Deposits and Collections
26-1-4-102.5. Application of Bank Provisions to Supervised Financial Organizations
26-1-4-103. Variation by Agreement; Measure of Damages; Action Constituting Ordinary Care
26-1-4-104. Definitions and Index of Definitions
26-1-4-106. Payable Through or Payable at Bank; Collecting Bank
26-1-4-107. Separate Office of Bank
26-1-4-108. Time of Receipt of Items
26-1-4-110. Electronic Presentment
26-1-4-111. Statute of Limitations
26-1-4-202. Responsibility for Collection or Return; When Action Timely
26-1-4-203. Effect of Instructions
26-1-4-204. Methods of Sending and Presenting; Sending Directly to Payor Bank
26-1-4-205. Depositary Bank Holder of Unendorsed Items
26-1-4-206. Transfer Between Banks
26-1-4-207. Transfer Warranties
26-1-4-208. Presentment Warranties
26-1-4-209. Encoding and Retention Warranties
26-1-4-210. Security Interest of Collecting Bank in Items, Accompanying Documents, and Proceeds
26-1-4-211. When Bank Gives Value for Purposes of Holder in Due Course
26-1-4-213. Medium and Time of Settlement by Bank
26-1-4-214. Right of Charge-Back or Refund; Liability of Collecting Bank; Return of Item
26-1-4-216. Insolvency and Preference
26-1-4-302. Payor Bank's Responsibility for Late Return of Item
26-1-4-401. When Bank May Charge Customer's Account
26-1-4-403. Customer's Right to Stop Payment; Burden of Proof of Loss
26-1-4-404. Bank Not Obligated to Pay Check More Than Six Months Old
26-1-4-405. Death or Incompetence of Customer
26-1-4-406. Customer's Duty to Discover and Report Unauthorized Signature or Alteration
26-1-4-407. Payor Bank's Right to Subrogation on Improper Payment
26-1-4-502. Presentment of "On Arrival" Drafts
26-1-4-504. Privilege of Presenting Bank to Deal With Goods; Security Interest for Expenses