2011 Kentucky Revised Statutes Article 4 Bank Deposits and Collections 355.4.402 Bank's liability to customer for wrongful dishonor -- Time of determining insufficiency of account.
KY Rev Stat § 355.4.402 (1996 through Reg Sess) What's This?
355.4-402 Bank's liability to customer for wrongful dishonor -- Time of
determining insufficiency of account.
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(2)
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Except as otherwise provided in this article, a payor bank wrongfully dishonors an
item if it dishonors an item that is properly payable, but a bank may dishonor an
item that would create an overdraft unless it has agreed to pay the overdraft.
A payor bank is liable to its customer for damages proximately caused by the
wrongful dishonor of an item. Liability is limited to actual damages proved and may
include damages for an arrest or prosecution of the customer or other consequential
damages. Whether any consequential damages are proximately caused by the
wrongful dishonor is a question of fact to be determined in each case.
A payor bank's determination of the customer's account balance on which a decision
to dishonor for insufficiency of available funds is based may be made at any time
between the time the item is received by the payor bank and the time that the payor
bank returns the item or gives notice in lieu of return, and no more than one
determination need be made. If, at the election of the payor bank, a subsequent
balance determination is made for the purpose of reevaluating the bank's decision to
dishonor the item, the account balance at that time is determinative of whether a
dishonor for insufficiency of available funds is wrongful.
Effective: January 1, 1997
History: Amended 1996 Ky. Acts ch. 130, sec. 103, effective January 1, 1997. -Created 1958 Ky. Acts ch. 77, sec. 4-402, effective July 1, 1960.
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