Source: http://updates.mwbllp.com/2014/12/fyi-ill-app-ct-holds-void-after-90-days.html
Timestamp: 2019-04-25 21:59:43+00:00

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(2) the account holder’s failure to contest the bank’s payment within the time requirements set forth in the agreement barred the claim.
In December 2003 and November 2010, the plaintiff account holder opened business checking accounts with the defendant bank pursuant to the terms of the bank’s “Handbook for Personal and Business Accounts” (“the agreement”).
The agreement provided specific procedures for stopping payments on checks, which included the bank’s specifically reserved right to pay a “stale check,” defined as one that is more than six months old. The agreement also required account holders to notify the bank of any erroneous statement entries or improper charges within sixty (60) days, and to commence any legal action against the bank within one year after the bank statement was made available to the account holder.
On July 10, 2010, the plaintiff account holder’s president issued a $50,000 check to his wife, whom he was divorcing. Although the face of the check stated “void after 90 days” above the signature line, the check was honored by the bank more than 90 days after its issuance on December 30, 2010. At no time between July 2010 and December 2010 did the plaintiff place a stop payment on the check or communicate with the bank about the check.
The plaintiff’s December 2010 account statement was made available to it in January 2010, which disclosed that the bank had honored the check on December 30, 2010. Nearly two years later, the plaintiff brought suit against the defendant bank seeking reimbursement of the $50,000 check, alleging that its account was improperly debited when the bank honored the check containing the “void after 90 days” language.
The lower court dismissed the plaintiff’s amended complaint, holding that the claim was barred by the terms of the parties’ written deposit account agreements requiring notification of the improper payment within sixty days, and legal action to be commenced within a year of making the statement available, as well as several provisions of the Uniform Commercial Code.
As you may recall, UCC §4-403(a) provides that a customer “may stop payment of any item drawn on the customer’s account…at a time and in a manner that affords the bank a reasonable opportunity to comply.” Here, the plaintiff account holder argued that, under this UCC provision, it was not required to comply with the stop payment terms of the agreement, which included specific notice and fee requirements for stopping payment of a check.
The Appellate Court rejected this argument under the plain language of the UCC, which permits variation of its provisions by agreement, and determined that the agreed-upon requirements of the stop pay provision superseded the UCC provision in question. See UCC §4-103(a).
Next, the Appellate Court determined whether the check’s “void” notation constituted a stop payment under UCC §4-403(a). Here, the plaintiff admitted it did not provide the check bearing the “void after 90 days” language directly to the bank; it was first transmitted to the payee of the check. The Appellate Court held that the “void after 90 days” notation did not comply with UCC §4-403(a), and did not provide a reasonable means to direct a bank to stop payment on a check.
Furthermore, the Court found the Plaintiff’s argument that the bank’s reservation of rights to pay a “stale check” was inapplicable because the check “was not stale [but instead] it was void” was without merit. As commentators of the UCC have stated, the effect of a bank customer writing “void after 90 days” on a check has been described as making the check stale after the initial 90-day period. 6A William D. Hawkland, et al., Uniform Commercial Code Series § 4-404:2 (2013) (“‘void after 60 days’ should operate to make a check stale after 60 days”); 7 Anderson on the Uniform Commercial Code § 4-404:8 [Rev.], at 466 (3d. ed. 2013).
Lastly, the Appellate Court held that the plaintiff account holder could not claim that the bank’s decision to honor the check was erroneous, given the plaintiff’s own failure to comply with the agreement’s sixty-day notice provision, and also could not claim that the one-year limitation period to commence legal action was procedurally unreasonable or “overly harsh or one-sided” so as to be unenforceable.
Accordingly, the Appellate Court affirmed the trial Court’s dismissal.

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