Stop Payment Orders In A Nutshell
LexisNexis (November 20, 2017, 1:57 PM EST) -- In our prior story, we considered a Fourth Circuit case on the issue of whether a bank customer seeking to avoid problematic debits can give instructions using the term "account freeze" rather "stop payment." In okaying the customer's phrase, the court employed a "functional" rather than a formal test. Let's now stand back a bit and summarize the rules governing stop payment orders under the UCC.
First, as the Fourth Circuit recognized, UCC 4-403(a) makes it clear that the customer "or any person authorized to draw...