§ 41-04-33 — (4-402) Bank's liability to customer for wrongful dishonor - Time of determining insufficiency of account

determining insufficiency of account.
1. Except as otherwise provided in this chapter, a payor bank wrongfully dishonors an
item if it dishonors an item that is properly payable, but a bank may dishonor an item
that would create an overdraft unless it had agreed to pay the overdraft.
2. A payor bank is liable to its customer for damages proximately caused by the wrongful
dishonor of an item. Liability is limited to actual damages proved and may include
damages for an arrest or prosecution of the customer or other consequential
damages. Whether any consequential damages are proximately caused by the
wrongful dishonor is a question of fact.
3. A payor bank's determination of the customer's account balance on which a decision
to dishonor for insufficiency of available funds is based may be made at any time
between the time the item is received by the payor bank and the time that the payor
bank returns the item or gives notice in lieu of return, and no more than one such
determination need be made. If, at the election of the payor bank, a subsequent
balance determination is made for the purpose of re-evaluating the bank's decision to
dishonor the item, the account balance at that time is determinative of whether a
dishonor for insufficiency of available funds is wrongful.