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Can you summarize 4 ARCO Chapter 4?
Uniform Commercial Code > Bank Deposits and Collections
Short Summary
These legal documents, part of the Arkansas Code under the Uniform Commercial Code, govern bank deposits and collections. They discuss the variation by agreement, measure of damages, and action constituting ordinary care in this context. The provisions can be varied by agreement, but a bank cannot disclaim responsibility for lack of good faith or failure to exercise ordinary care, nor can they limit the measure of damages for such lack or failure. However, the parties can agree on the standards by which the bank’s responsibility is measured, as long as those standards are not manifestly unreasonable. Federal Reserve regulations, operating circulars, and clearinghouse rules have the effect of agreements. Action or non-action approved by these documents or pursuant to Federal Reserve regulations or operating circulars is considered the exercise of ordinary care. The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount that could not have been realized by the exercise of ordinary care, and if there is bad faith, it includes any other damages suffered as a proximate consequence. The documents also provide definitions for various terms used in the context of bank deposits and collections under the Uniform Commercial Code in Arkansas. They define terms such as ‘account’, ‘banking day’, ‘customer’, ‘draft’, ‘item’, and ‘settle’, among others. The documents reference other definitions from different sections of the Uniform Commercial Code that apply to this chapter. Additionally, they mention that Chapter 1 of the subtitle contains general definitions and principles of construction and interpretation applicable throughout this chapter.
Whom does it apply to?
Banks, consumers, individuals involved in bank deposits and collections
What does it govern?
Bank deposits and collections
What are exemptions?
No specific exemptions are mentioned.
What are the Penalties?
No penalties for non-compliance or violation of provisions are mentioned.
Jurisdiction
Arkansas