§ 41-04-03 — (4-103) Variation by agreement - Measure of damages - Action constituting ordinary care

North Dakota § 41-04-03

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-04: Bank Deposits and Collections

Text

ordinary care.
1. The effect of the provisions of this chapter may be varied by agreement, but the parties
to the agreement may not disclaim a bank's responsibility for its own lack of good faith
or failure to exercise ordinary care or limit the measure of damages for the lack or
failure. The parties may, however, 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, clearinghouse 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 chapter or under federal reserve regulations or
operating circulars constitutes the exercise of ordinary care and, in the absence of
special instructions, action or nonaction consistent with clearinghouse and similar rules
or with a general banking usage not disapproved by this chapter, constitutes prima
facie the exercise of ordinary care.
4. The specification or approval of certain procedures by this chapter does not constitute
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.