Common use of Wrongful Dishonor Clause in Contracts

Wrongful Dishonor. Bank’s Wrongful Honor shall be limited to the lesser of the amount of the wrongfully paid Presented Check or Company’s actual damages resulting from Bank’s payment of the Presented Check. Bank retains the right to assert the defense that Company has sustained no actual damages because Bank’s Wrongful Honor discharged for value an indebtedness of Company. Bank also retains the right to assert Company’s failure to exercise reasonable promptness or ordinary care under the UCC. Nothing herein shall constitute a waiver or limitation of the rights of Bank under the UCC. Bank’s liability for wrongful dishonor of a Presented Check shall be limited to the damages for wrongful dishonor recoverable under UCC Articles 3 and 4; provided, however, that Bank shall have no liability to Company for wrongful dishonor when Bank, acting in good faith, returns a Presented Check: (i) that it reasonably believed was not properly payable; or (ii) if required to do so by the service of legal process on Bank or the instructions of regulatory or government authorities or courts. Company agrees that Bank exercises ordinary care whenever it pays or returns a Presented Check consistent with the provisions of this Agreement.