Bank Statements, Cancelled Checks, and Article Four in the Electronic Age

My task was to prepare a short article dealing in some depth with specific problems which have arisen under Article Four of the Uniform Commercial Code (Code). Unfortunately for purposes of criticism, but happily for those affected by Article Four, a canvass of recent reported cases as well as bank operations people and bank counsel has revealed very few problems of any significance to either the general practitioner or even the so-called commercial law specialist. This prompts two comments: (1) Article Four seems to be working so smoothly that to develop a “problem” would be to make a mountain out of a molehill (all too frequently done in law review articles); and (2) a greater service could perhaps be performed by considering briefly a more general problem-namely, the effect, if any, of the accelerating operational and technological changes in the banking industry on Article Four. In order to examine the impact of present and contemplated operational innovations and, to some extent, measure the workability of the Code provisions, one aspect of the bank-customer relationship-the periodic issuance of checking account statements accompanied by paid items-has been selected as the focal point of discussion.