(a) A payor or collecting bank‘s authority to accept, pay, or collect an item or to account for proceeds of its collection, if otherwise effective, is not rendered ineffective by incompetence of a customer of either bank existing at the time the item is issued or its collection is undertaken if the bank does not know of an adjudication of incompetence. Neither death nor incompetence of a customer revokes the authority to accept, pay, collect, or account until the bank knows of the fact of death or of an adjudication of incompetence and has reasonable opportunity to act on it.

(b) Even with knowledge, a bank may, for 10 days after the date of death, pay or certify checks drawn on or before that date unless ordered to stop payment by a person claiming an interest in the account.

Terms Used In California Commercial Code 4405

  • Account: means any deposit or credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit. See California Commercial Code 4104
  • Bank: means a person engaged in the business of banking, and includes a savings bank, savings and loan association, credit union, and trust company. See California Commercial Code 1201
  • Customer: means a person having an account with a bank or for whom a bank has agreed to collect items, including a bank that maintains an account at another bank. See California Commercial Code 4104
  • Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See California Commercial Code 4104
  • Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See California Commercial Code 1201

(Amended by Stats. 1992, Ch. 914, Sec. 44. Effective January 1, 1993.)

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