2006 New York Code - Variation By Agreement; Measure Of Damage; Certain Action Constituting Ordinary Care.

 
  Section 4--103. Variation  by  Agreement;  Measure  of  Damages; Certain
                    Action Constituting Ordinary Care.
    (1) 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
  responsibility  is  to  be measured if such standards are not manifestly
  unreasonable.
    (2) Federal Reserve regulations and operating letters, clearing  house
  rules, and the like, have the effect of agreements under subsection (1),
  whether  or  not  specifically  assented to by all parties interested in
  items handled.
    (3) Action or non-action approved  by  this  Article  or  pursuant  to
  Federal   Reserve  regulations  or  operating  letters  constitutes  the
  exercise of ordinary care and, in the absence of  special  instructions,
  action  or  non-action consistent with clearing house rules and the like
  or with a general banking usage not disapproved by this  Article,  prima
  facie constitutes the exercise of ordinary care.
    (4)  The  specification  or  approval  of  certain  procedures by this
  Article does not constitute disapproval of other procedures which may be
  reasonable under the circumstances.
    (5) The measure of damages for failure to exercise  ordinary  care  in
  handling  an  item  is the amount of the item reduced by an amount which
  could not have been realized by the use  of  ordinary  care,  and  where
  there  is  bad  faith it includes other damages, if any, suffered by the
  party as a proximate consequence.