Texas Business & Commerce Code - Section 4.103. Variation By Agreement; Measure Of Damages; Action Constituting Ordinary Care
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§ 4.103. VARIATION BY AGREEMENT; MEASURE OF DAMAGES;
ACTION CONSTITUTING ORDINARY CARE. (a) The effect of the
provisions of this chapter may be varied by agreement, but the
parties to the agreement cannot disclaim a bank's responsibility
for its lack of good faith or failure to exercise ordinary care or
limit the measure of damages for the lack or failure. However, the
parties may determine by agreement the standards by which the
bank's responsibility is to be measured if those standards are not
manifestly unreasonable.
(b) Federal Reserve regulations and operating circulars,
clearing-house rules, and the like have the effect of agreements
under Subsection (a), whether or not specifically assented to by
all parties interested in items handled.
(c) Action or non-action approved by this chapter or
pursuant to Federal Reserve regulations or operating circulars is
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 chapter, is prima facie the exercise of ordinary care.
(d) The specification or approval of certain procedures by
this chapter is not disapproval of other procedures that may be
reasonable under the circumstances.
(e) The measure of damages for failure to exercise ordinary
care in handling an item is the amount of the item reduced by an
amount that could not have been realized by the exercise of ordinary
care. If there is also bad faith, it includes any other damages the
party suffered as a proximate consequence.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
Amended by Acts 1995, 74th Leg., ch. 921, § 4, eff. Jan. 1, 1996.
Section: 3.601 3.602 3.603 3.604 3.605 4.101 4.102 4.103 4.104 4.105 4.106 4.107 4.108 4.109 4.110
Last modified: August 10, 2007
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