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New York Consolidated Laws, Uniform Commercial Code - UCC § 4-402. Bank's Liability to Customer for Wrongful Dishonor

Current as of January 01, 2026 | Updated by Findlaw Staff

A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item.  When the dishonor occurs through mistake liability is limited to actual damages proved.  If so proximately caused and proved damages 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.

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Cite this article: FindLaw.com - New York Consolidated Laws, Uniform Commercial Code - UCC § 4-402. Bank's Liability to Customer for Wrongful Dishonor - last updated January 01, 2026 | https://codes.findlaw.com/ny/uniform-commercial-code/ucc-sect-4-402/

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