§490:4-103  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, clearing-house 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 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.



(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. [L 1965, c 208, §4-103; HRS §490:4-103; am L 1991, c
118, pt of §4]