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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 5947

August 7, 1981

BANKS AND BANKING:

Authority to impose fee on stop payment order

UNIFORM COMMERCIAL CODE:

Stop payment of checks

A bank or other financial institution may receive a fee for a stop payment request pursuant to an agreement with its customers if the terms of the contract clearly and specifically provide that the customer consents to pay the fee.

Martha R. Seger

Commissioner

Financial Institutions Bureau

Department of Commerce

Law Building

Lansing, Michigan

With respect to OAG, 1981-1982, No 5867, p 104 (April 13, 1981), you request my opinion whether a financial institution may contract to charge a stop payment fee. OAG, 1981-1982, No 5867, supra, concluded that the Uniform Commercial Code (UCC), 1962 PA 174, Sec. 4403; MCLA 440.4403; MSA 19.4403, gives customers the statutory right to order a bank to stop payment on a check. The opinion, however, did not address the enforceability of an express contract between the bank and its customers wherein the customer agrees to pay a fee in connection with a stop payment order.

Examination of the provisions of the UCC discloses that the parties may contract to vary its terms. 1962 PA 174, Sec. 1102(3); MCLA 440.1102(3); MSA 19.1102(3), provides:

'The effect of provisions of this act may be varied by agreement, except as otherwise provided in this act and except that the obligations of good faith, diligence, reasonableness and care prescribed by this act may not be disclaimed by agreement but the parties may by agreement determine the standards by which the performance of such obligations is to be measured if such standards are not manifestly unreasonable.'

Similarly, 1962 PA 174, Sec. 4103(1); MCLA 440.4103(1); MSA 19.4103(1), provides that with respect to the Code chapter dealing with checks:

'The effect of the provisions of this article may be varied by agreement except that no agreement can disclaim a bank's responsibility for its own lack of good faith or failure to exercise ordinary care or can limit the measure of damages for such lack or failure; but the parties may by agreement determine the standards by which such responsibiity is to be measured if such standards are not manifestly unreasonable.'

The intent of the drafters of the UCC, as discerned from the commentary provided, further reveals that 'freedom of contract is a principle of the Code.' MCLA, Vol 21, p 24 (1967 ed); MSA, Vol 14, p 319 (1975 ed). It is also stated that 1962 PA 174, Sec. 4103(1), supra, 'confers blanket power to vary all provisions of the article by agreements of the ordinary kind.' MCLA, Vol 22, p 480 (1967 ed); MSA, Vol 14, p 730 (1975 ed).

Contracts wherein such waivers are demanded by a standardized agreement in which the customer is not afforded a realistic opportunity to negotiate the terms are adhesion contracts. Madden v Kaiser Foundation Hospitals, 552 P2d 1178; 131 Cal Rptr 882 (S Ct Cal, 1976). Adhesion contracts include bankcustomer deposit agreements. Greenwood v Beeson & The First National Bank of Oregon, 454 P2d 633 (S Ct Ore, 1969). Moreover, adhesion contracts are not enforceable unless their provisions are 'conspicuous, plain, and clear.' Madden v Kaiser Foundation Hospitals, supra, p 1185. The Michigan Supreme Court recognized that statutory and common law rights may not be abrogated by unconspicuous or vague language contained in a signature card agreement, or pursuant to bank bylaws which have not been communicated and consented to by the customer. Benge v Michigan National Bank, 341 Mich 441, 452; 67 NW2d 721 (1964). Ackenhausen v Peoples Savings Bank, 110 Mich 175, 182; 68 NW 118, 121 (1896). Further, the Michigan Consumer Protection Act, 1976 PA 331, Sec. 3(1)(t); MCLA 445.903(1)(t); MSA 19.418(3)(t), defies an unfair, unconscionable and deceptive practice as '[e]ntering into a consumer transaction in which the consumer waives or purports to waive a right, benefit, or immunity provided by law, unless the waiver is clearly stated and the consumer has specifically consented to it.'

It is my opinion, therefore, that a bank may charge a fee for a stop payment request pursuant to an agreement with its customers if the terms of the contract clearly and specifically provide that the customer consents to pay the fee.

Frank J. Kelley

Attorney General


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