                                 CODE OF VIRGINIA

WHEN BANK MAY CHARGE CUSTOMER&#8217;S ACCOUNT (§ 8.4-401)

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 the 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 &#xA7; 8.4-403 (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 &#xA7; 8.4-303. 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 &#xA7; 8.4-402.

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.

HISTORY: 1964, c. 219; 1992, c. 693.