Nebraska Uniform Commercial Code 4-103

UCC 4-103

4-103.

Variation by agreement; measure of damages; action constituting ordinary care.

(a) 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.

(b) Federal reserve regulations and operating circulars, clearinghouse rules, and the like have the effect of agreements under subsection (a), whether or not specifically assented to by all parties interested in items handled.

(c) 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 clearinghouse rules and the like or with a general banking usage not disapproved by this article, is prima facie the exercise of ordinary care.

(d) The specification or approval of certain procedures by this article is not disapproval of other procedures that may be reasonable under the circumstances.

(e) 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.

Source

Annotations

  • Under former law, the statutory rule that a payor bank is accountable for a demand item presented to it and not settled for, paid, returned, or a notice of dishonor sent before the midnight deadline may be varied or waived by agreement. Stauffer Seeds, Inc. v. Nebraska Sec. Bank of Deshler, 222 Neb. 594, 386 N.W.2d 2 (1986).

  • Under former law, the rule that a payor bank is accountable for a demand item presented to it and not paid, settled for, returned, or a notice of dishonor sent before the midnight deadline may be varied or waived by agreement. Idaho Forest Industries, Inc. v. Minden Exch. Bank & Trust Co., 212 Neb. 820, 326 N.W.2d 176 (1982).

  • Damages payable for failure to use ordinary care may include consequential damages proximately caused upon showing of bad faith. Berman v. United States Nat. Bank, 197 Neb. 268, 249 N.W.2d 187 (1976).

  • Variation agreements authorized to modify the Uniform Commercial Code provisions by creating a deadline earlier than "midnight deadline." Berman v. United States Nat. Bank, 197 Neb. 268, 249 N.W.2d 187 (1976).