Mich. Comp. Laws » Michigan Compiled Laws / Chapter 440 / Act 174 of 1962
Michigan Compiled Laws

Mich. Comp. Laws § 440.4303 (2026)

Payor bank; items subject to knowledge notice, stop-payment order, legal process, or setoff; order in which times may be handled.

✓ current as of July 2026
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UNIFORM COMMERCIAL CODE


Act 174 of 1962


440.4303 Payor bank; items subject to knowledge notice, stop-payment order, legal process, or setoff; order in which times may be handled.

Sec. 4303.

    (1) Any knowledge, notice, or stop-payment order received by, legal process served upon or setoff exercised by a payor bank comes too late to terminate, suspend, or modify the bank's right or duty to pay an item or to charge its customer's account for the item if the knowledge, notice, stop-payment order or legal process is received or served and a reasonable time for the bank to act thereon expires or the setoff is exercised after the earliest of the following:

    (a) The bank accepts or certifies the item.

    (b) The bank pays the item in cash.

    (c) The bank settles for the item without having a right to revoke the settlement under statute, clearing-house rule or agreement.

    (d) The bank becomes accountable for the amount of the item under section 4302 dealing with the payor bank's responsibility for late return of items.

    (e) With respect to checks, a cutoff hour no earlier than 1 hour after the opening of the next banking day after the banking day on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of the next banking day after the banking day on which the bank received the check.

    (2) Subject to subsection (1) items may be accepted, paid, certified, or charged to the indicated account of its customer in any order.

History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993

Notes of Decisions
Cited in 2 cases, 1981–2013 · leading case: Ladd v. Motor City Plastics Co., 842 N.W.2d 388 (Mich. Ct. App. 2013).
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Ladd v. Motor City Plastics Co., 842 N.W.2d 388 (Mich. Ct. App. 2013). “” See Baker v Nat’l City Bank of Cleveland, 511 F2d 1016, 1018 (CA 6, 1975); see also Official *108 Comment 5 to UCC § 4-303(1) (stating that “[i]n the case of setoff the effective time is when the setoff is actually made”).”
Dep't of Treasury v. Bank of Commonwealth, 314 N.W.2d 688 (Mich. Ct. App. 1981). · cites it 2× “The Department of Treasury argues that the bank’s reliance on MCL 440.4303; MSA 19.4303 is misplaced, that section only applying to protect the payee of the draft.”
— Mich. Comp. Laws § 440.4303(1) — 2 cases
Ladd v. Motor City Plastics Co., 842 N.W.2d 388 (Mich. Ct. App. 2013). “” See Baker v Nat’l City Bank of Cleveland, 511 F2d 1016, 1018 (CA 6, 1975); see also Official *108 Comment 5 to UCC § 4-303(1) (stating that “[i]n the case of setoff the effective time is when the setoff is actually made”).”
Dep't of Treasury v. Bank of Commonwealth, 314 N.W.2d 688 (Mich. Ct. App. 1981). “The Department of Treasury argues that the bank’s reliance on MCL 440.4303; MSA 19.4303 is misplaced, that section only applying to protect the payee of the draft.”
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