§ 25-4-103. Variation by agreement; measure of damages; action constituting ordinary care.
§25‑4‑103. Variation by agreement; measure of damages; actionconstituting ordinary care.
(a) The effect of theprovisions of this Article may be varied by agreement, but the parties to theagreement cannot disclaim a bank's responsibility for its lack of good faith orfailure to exercise ordinary care or limit the measure of damages for the lackor failure. However, the parties may determine by agreement the standards bywhich the bank's responsibility is to be measured if those standards are notmanifestly unreasonable.
(b) Federal reserveregulations and operating circulars, clearing‑house rules, and the likehave the effect of agreements under subsection (a) of this section, whether ornot specifically assented to by all parties interested in items handled.
(c) Action or nonactionapproved by this Article or pursuant to federal reserve regulations oroperating circulars is the exercise of ordinary care and, in the absence ofspecial instructions, action or nonaction consistent with clearing‑houserules and the like or with a general banking usage not disapproved by thisArticle, is prima facie the exercise of ordinary care.
(d) The specificationor approval of certain procedures by this Article is not disapproval of otherprocedures that may be reasonable under the circumstances.
(e) The measure ofdamages for failure to exercise ordinary care in handling an item is the amountof the item reduced by an amount that could not have been realized by theexercise of ordinary care. If there is also bad faith, it includes any otherdamages the party suffered as a proximate consequence. (1965,c. 700, s. 1; 1995, c. 232, s. 2.)