§ 4-103 — Variation by Agreement; Measure of Damages; Certain Action Constituting Ordinary Care

New York § 4-103

• Jurisdiction: New York
• Law UCC: Uniform Commercial Code
• Part 1: General Provisions and Definitions
• Art. 4: Bank Deposits and Collections

Text

Section 4--103. Variation by Agreement; Measure of Damages; Certain\n Action Constituting Ordinary Care.\n (1) The effect of the provisions of this Article may be varied by\nagreement except that no agreement can disclaim a bank's responsibility\nfor its own lack of good faith or failure to exercise ordinary care or\ncan limit the measure of damages for such lack or failure; but the\nparties may by agreement determine the standards by which such\nresponsibility is to be measured if such standards are not manifestly\nunreasonable.\n (2) Federal Reserve regulations and operating letters, clearing house\nrules, and the like, have the effect of agreements under subsection (1),\nwhether or not specifically assented to by all parties interested in\nitems handled.\n (3) Action or non-action approved by this Article or pursuant to\nFederal Reserve regulations or operating letters constitutes the\nexercise of ordinary care and, in the absence of special instructions,\naction or non-action consistent with clearing house rules and the like\nor with a general banking usage not disapproved by this Article, prima\nfacie constitutes the exercise of ordinary care.\n (4) The specification or approval of certain procedures by this\nArticle does not constitute disapproval of other procedures which may be\nreasonable under the circumstances.\n (5) The measure of damages for failure to exercise ordinary care in\nhandling an item is the amount of the item reduced by an amount which\ncould not have been realized by the use of ordinary care, and where\nthere is bad faith it includes other damages, if any, suffered by the\nparty as a proximate consequence.\n