Find Laws Find Lawyers Free Legal Forms USA State Laws

ALABAMA STATUTES AND CODES

Section 7-4-402 Bank's liability to customer for wrongful dishonor; time of determining insufficiency of account.

Section 7-4-402

Bank's liability to customer for wrongful dishonor; time of determining insufficiency of account.

(a) 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.

(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(Acts 1965, No. 549, p. 811; repealed by Acts 1995, No. 95-668, p. 1381, §2; added by Acts 1995, No. 95-668, p. 1381, §2.)

Alabama Forms by Issue

Alabama Court Forms
> Claims
Alabama Divorce Forms
Alabama Environmental Forms
Alabama Marriage Forms
Alabama Name Change Forms
Alabama Other Forms
Alabama Retirement Forms
Alabama Tax Forms

Alabama Law

Alabama State Laws
    > Alabama Child Support
    > Alabama Gun Law
    > Alabama Statute
Alabama Tax
    > Alabama State Tax
Alabama Agencies
    > Alabama Department of Corrections
    > Alabama Department of Education
    > Alabama Department of Revenue
    > Alabama Department of Transportation
    > Alabama DMV
    > Alabama Medicaid
    > Alabama Secretary of State

Alabama Court Map

Tips