57A-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 is effective for the period stated in §57A-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 §57A-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 §57A-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.
Source: SL 1994, ch 368, §4-401.
Structure South Dakota Codified Laws
Title 57A - Uniform Commercial Code
Chapter 04 - Bank Deposits And Collections
Section 57A-4-101 - Short title.
Section 57A-4-102 - Applicability.
Section 57A-4-104 - Definitions and index of definitions.
Section 57A-4-106 - Payable through or payable at bank--Collecting bank.
Section 57A-4-107 - Separate office of a bank.
Section 57A-4-108 - Time of receipt of items.
Section 57A-4-110 - Electronic presentment.
Section 57A-4-111 - Statute of limitations.
Section 57A-4-202 - Responsibility for collection or return--When action timely.
Section 57A-4-203 - Effect of instructions.
Section 57A-4-204 - Methods of sending and presenting--Sending directly to payor bank.
Section 57A-4-205 - Depositary bank holder of unendorsed item.
Section 57A-4-206 - Transfer between banks.
Section 57A-4-207 - Transfer warranties.
Section 57A-4-208 - Presentment warranties.
Section 57A-4-209 - Encoding and retention warranties.
Section 57A-4-211 - When bank gives value for purposes of holder in due course.
Section 57A-4-213 - Medium and time of settlement by bank.
Section 57A-4-214 - Right of charge-back or refund; Liability of collecting bank; Return of item.
Section 57A-4-216 - Insolvency and preference.
Section 57A-4-302 - Payor bank's responsibility for late return of item.
Section 57A-4-401 - When bank may charge customer's account.
Section 57A-4-403 - Customer's right to stop payment--Burden of proof of loss.
Section 57A-4-404 - Bank not obligated to pay check more than six months old.
Section 57A-4-405 - Death or incompetence of customer.
Section 57A-4-406 - Customer's duty to discover and report unauthorized signature or alteration.
Section 57A-4-407 - Payor bank's right to subrogation on improper payment.
Section 57A-4-502 - Presentment of "on arrival" drafts.
Section 57A-4-504 - Privilege of presenting bank to deal with goods--Security interest for expenses.