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UNIFORM COMMERCIAL CODE > BANK DEPOSITS AND COLLECTIONS
Short Summary
The provided legal document is a chapter of the Texas Statutes’ Business and Commerce Code, specifically under the Uniform Commercial Code section on Bank Deposits and Collections. It governs the liability of a bank for its actions or non-actions regarding items handled for presentment, payment, or collection. The document specifies that if there is a conflict between this chapter and Chapters 3 and 8, this chapter governs Chapter 3, but Chapter 8 governs this chapter. The liability of a bank is determined by the law of the place where the bank or its branch/separate office is located. Additionally, the laws of the state govern a deposit contract between a bank and a consumer account holder if the branch or separate office accepting the contract is located in that state. The document defines a consumer account holder as a natural person who holds a deposit account primarily for personal, family, or household purposes, excluding those holding accounts in a professional capacity. The document also states that the provisions related to bank deposits and collections can be varied by agreement, except for disclaiming a bank’s responsibility for lack of good faith or failure to exercise ordinary care, or limiting 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 clearing-house rules are considered agreements under this document. Actions or non-actions approved by this chapter or pursuant to Federal Reserve regulations or operating circulars are considered the exercise of ordinary care. The document also clarifies that the specification or approval of certain procedures does not disapprove of other reasonable procedures. 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. If there is also bad faith, additional damages may be included. The document provides definitions for various terms used in the context of bank deposits and collections under the Uniform Commercial Code (UCC) in the Texas Statutes’ Business and Commerce Code. It defines terms such as ‘account,’ ‘banking day,’ ‘customer,’ ‘draft,’ ‘item,’ and ‘settle,’ among others. The document also references definitions from other chapters of the UCC that apply to this chapter. Overall, this document serves as a reference for understanding the key terms and concepts related to bank deposits and collections in Texas.
Whom does it apply to?
Banks, consumer account holders, and parties involved in the collection of items.
What does it govern?
The liability of a bank for its actions or non-actions regarding items handled for presentment, payment, or collection.
What are exemptions?
Parties cannot disclaim a bank's responsibility for lack of good faith or failure to exercise ordinary care, or 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.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Texas