State Codes and Statutes
Statutes > Virginia > Title-8-4 > Part-4 > 8-4-402§ 8.4-402. Bank's liability to customer for wrongful dishonor; time ofdetermining insufficiency of account.
(a) Except as otherwise provided in this title, a payor bank wrongfullydishonors an item if it dishonors an item that is properly payable, but abank may dishonor an item that would create an overdraft unless it has agreedto pay the overdraft.
(b) A payor bank is liable to its customer for damages proximately caused bythe wrongful dishonor of an item. Liability is limited to actual damagesproved and may include damages for an arrest or prosecution of the customeror other consequential damages. Whether any consequential damages areproximately caused by the wrongful dishonor is a question of fact to bedetermined in each case.
(c) A payor bank's determination of the customer's account balance on which adecision to dishonor for insufficiency of available funds is based may bemade at any time between the time the item is received by the payor bank andthe time that the payor bank returns the item or gives notice in lieu ofreturn, and no more than one determination need be made. If, at the electionof the payor bank, a subsequent balance determination is made for the purposeof reevaluating the bank's decision to dishonor the item, the account balanceat the time is determinative of whether a dishonor for insufficiency ofavailable funds is wrongful.
(Code 1950, § 6-71; 1964, c. 219; 1992, c. 693.)
