Texas Business & Commerce Code - Section 4.402. Bank's Liability To Customer For Wrongful Dishonor
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Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 4.402. Bank's Liability To Customer For Wrongful Dishonor
§ 4.402. BANK'S LIABILITY TO CUSTOMER FOR WRONGFUL
DISHONOR. (a) Except as otherwise provided by this chapter, 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.
(b) 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.
(c) 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.
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: 4.214 4.215 4.216 4.301 4.302 4.303 4.401 4.402 4.403 4.404 4.405 4.406 4.407 4.501 4.502
Last modified: August 10, 2007
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