Sec. 42a-4-103. Variation by agreement. Measure of damages. Action constituting ordinary care.
Sec. 42a-4-103. Variation by agreement. Measure of damages. Action constituting ordinary care. (a) The effect of the provisions of this article may be varied by
agreement, but the parties to the agreement cannot disclaim a bank's responsibility for
its lack of good faith or failure to exercise ordinary care or limit the measure of damages
for the lack or failure. However, the parties may determine by agreement the standards
by which the bank's responsibility is to be measured if those standards are not manifestly
unreasonable.
(b) Federal reserve regulations and operating circulars, clearinghouse rules, and the
like have the effect of agreements under subsection (a), whether or not specifically
assented to by all parties interested in items handled.
(c) Action or nonaction approved by this article or pursuant to federal reserve regulations or operating circulars is the exercise of ordinary care and, in the absence of special
instructions, action or nonaction consistent with clearinghouse rules and the like or with
a general banking usage not disapproved by this article, is prima facie the exercise of
ordinary care.
(d) The specification or approval of certain procedures by this article is not disapproval of other procedures that may be reasonable under the circumstances.
(e) 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 it includes any other damages the
party suffered as a proximate consequence.
(1959, P.A. 133, S. 4-103; P.A. 91-304, S. 70.)
History: P.A. 91-304 replaced numeric with alphabetic Subsec. indicators and made minor changes in wording.
Cited. 4 CA 39.