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Can you summarize IACO 554.4402?
UNIFORM COMMERCIAL CODE > Banks liability to customer for wrongful dishonor time of determining insufficiency of account.
Short Summary
This legal document pertains to the liability of a payor bank to its customer for wrongful dishonor of an item. The payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, unless it has agreed to pay the overdraft. The payor bank is liable to its customer for damages caused by the wrongful dishonor, including actual damages and consequential damages. The determination of the customer’s account balance, on which the decision to dishonor for insufficiency of available funds is based, can be made at any time between the receipt of the item by the payor bank and the return of the item or giving notice in lieu of return. If a subsequent balance determination is made for reevaluating the bank’s decision, the account balance at that time determines whether the dishonor for insufficiency of available funds is wrongful.
Whom does it apply to?
Payor banks and their customers
What does it govern?
Banks liability to customer for wrongful dishonor time of determining insufficiency of account
What are exemptions?
No exemptions are mentioned
What are the Penalties?
Liability is limited to actual damages proved and may include damages for an arrest or prosecution of the customer or other consequential damages
Jurisdiction
Iowa