70A-4-402 - Bank's liability to customer for wrongful dishonor -- Time of determining insufficiency of account. - Utah Statutes

70A-4-402. Bank's liability to customer for wrongful dishonor -- Time ofdetermining insufficiency of account.
(1) Except as otherwise provided in this chapter, a payor bank wrongfully dishonors anitem if it dishonors an item that is properly payable, but a bank may dishonor an item that wouldcreate an overdraft unless it has agreed to pay the overdraft.
(2) A payor bank is liable to its customer for damages proximately caused by thewrongful dishonor of an item. Liability is limited to actual damages proved and may includedamages for an arrest or prosecution of the customer or other consequential damages. Whetherany consequential damages are proximately caused by the wrongful dishonor is a question of factto be determined in each case.
(3) A payor bank's determination of the customer's account balance on which a decisionto dishonor for insufficiency of available funds is based may be made at any time between thetime the item is received by the payor bank and the time that the payor bank returns the item orgives notice in lieu 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 the purpose ofreevaluating the bank's decision to dishonor the item, the account balance at that time isdeterminative of whether a dishonor for insufficiency of available funds is wrongful.

Amended by Chapter 237, 1993 General Session