§ 6A-4-402 - Bank's liability to customer for wrongful dishonor – Time of determining insufficiency of account. - Rhode Island Statutes

SECTION 6A-4-402

   § 6A-4-402  Bank's liability to customerfor wrongful dishonor – Time of determining insufficiency of account.– (a) Except as otherwise provided in this chapter, a payor bank wrongfullydishonors an item if it dishonors an item that is properly payable, but a bankmay dishonor an item that would create an overdraft unless it has agreed to paythe overdraft.

   (b) A payor bank is liable to its customer for damagesproximately caused by the wrongful dishonor of an item. Liability is limited toactual damages proved and may include damages for an arrest or prosecution ofthe customer or other consequential damages. Whether any consequential damagesare proximately caused by the wrongful dishonor is a question of fact to bedetermined in each case.

   (c) A payor bank's determination of the customer's accountbalance on which a decision to dishonor for insufficiency of available funds isbased may be made at any time between the time the item is received by thepayor bank and the time that the payor bank returns the item or gives notice inlieu of return, and no more than one determination need be made. If, at theelection of the payor bank, a subsequent balance determination is made for thepurpose of reevaluating the bank's decision to dishonor the item, the accountbalance at that time is determinative of whether a dishonor for insufficiencyof available funds is wrongful.