N.Y. Uniform Commercial Code 4-402 – Bank's Liability to Customer for Wrongful Dishonor
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Section 4–402. Bank's Liability to Customer for Wrongful Dishonor.
Terms Used In N.Y. Uniform Commercial Code 4-402
- Arrest: Taking physical custody of a person by lawful authority.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. When the dishonor occurs through mistake liability is limited to actual damages proved. If so proximately caused and proved damages 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.