§490:4-402  Bank's liability to customer for
wrongful dishonor; time of determining insufficiency of account.  (a) 
Except as otherwise provided in this article, 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.



(b)  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 to be determined in each case.



(c)  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 determination need be
made.  If, at the election of the payor bank, a subsequent balance
determination is made for the purpose of reevaluating 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. [L 1965, c 208,
§4-402; HRS §490:4-402; am L 1991, c 118, pt of §4]