§ 554.4103 — Variation by agreement — measure of damages — action constituting ordinary care

Iowa § 554.4103

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

care.
1. 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.
2. Federal reserve regulations and operating circulars, clearing-house rules, and the like
have the effect of agreements under subsection 1, whether or not specifically assented to by
all parties interested in items handled.
3. 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 clearing-house rules and the like or with
a general banking usage not disapproved by this Article, is prima facie the exercise of
ordinary care.
4. The specification or approval of certain procedures by this Article is not disapproval of
other procedures that may be reasonable under the circumstances.
5. 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.

Legislative History

[C66, 71, 73, 75, 77, 79, 81, §554.4103]