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Texas Business & Commerce Code - Section 4.403. Customer's Right To Stop Payment; Burden Of Proof Of Loss

Legal Research Home > Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 4.403. Customer's Right To Stop Payment; Burden Of Proof Of Loss

§ 4.403. CUSTOMER'S RIGHT TO STOP PAYMENT;  BURDEN OF 
PROOF OF LOSS.  (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 those persons may stop payment or close the account.
	(b)  A stop-payment order is effective for six months and is 
binding on the bank only if it is in a dated, authenticated record 
that describes the item with certainty.  A stop-payment order may be 
renewed for additional six-month periods by an authenticated 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 Section 4.402.

Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.  
Amended by Acts 1995, 74th Leg., ch. 921, § 4, eff. Jan. 1, 1996;  
Acts 2005, 79th Leg., ch. 95, § 20, eff. Sept. 1, 2005.

Last modified: August 10, 2007