Code of Alabama

Ala. Code § 7-4-403 (2026)

Customer’s Right to Stop Payment; Burden of Proof of Loss.

✓ official Alabama Legislature (ALISON) text, current July 2026

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(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 7-4-303. If the signature of more than one person is required to draw on an account, any of these persons may stop payment or close the account.

(b) A stop-payment order is effective for six months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in writing within that period. A stop-payment order may be renewed for additional six-month periods by a writing 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 7-4-402.

(Acts 1965, No. 549, p. 811; repealed by Acts 1995, No. 95-668, p. 1381, §2; added by Acts 1995, No. 95-668, p. 1381, §2.)

Notes of Decisions

Cited in 3 cases, 1978–1989 · leading case: Sherrill v. Frank Morris, Etc., 366 So. 2d 251 (Ala. 1978).

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Sherrill v. Frank Morris, Etc., 366 So. 2d 251 (Ala. 1978). “" § 7-4-403(1) (Code 1975). To be effective and bind the bank, the order must be explicit and describe the check with reasonable accuracy.”

Home Bank of Guntersville v. PERPETUAL Fed. S. & L. ASS'N, 547 So. 2d 840 (Ala. 1989). “" Thus, Home Bank is both the drawer and drawee of the instrument; Floyd Ramsey is the payee.”

First Alabama Bank v. Deupree Food Sys., Inc. (In re Deupree Food Sys., Inc.), 99 B.R. 83 (Bankr. N.D. Ala. 1988). “For example § 7-4-403 states that an oral stop-payment order binds a bank for only 14 days and that a stop-payment order “must be received at such time and in such manner as to afford the bank a reasonable opportunity to act upon it prior to any action by the bank with respect…”

— Ala. Code § 7-4-403(1) — 1 case

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