Texas Business and Commerce Code 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.
Terms Used In Texas Business and Commerce Code 4.403
- 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 Texas Business and Commerce Code 4.104
- 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 Texas Business and Commerce Code 4.104
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See Texas Business and Commerce Code 4.104
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
- Signature: includes the mark of a person unable to write, and "subscribe" includes the making of such a mark. See Texas Government Code 312.011
(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.