Common use of Wrongful Honor Clause in Contracts

Wrongful Honor. It shall not constitute wrongful honor by FI if FI pays an Exception Item listed in an Exception Item report timely provided and received by the Company and: (a) Company issued a “pay” decision; or (b) Company selected the pay “default decision” and did not issue a “return” decision. In the event that an item is wrongfully honored, FI’s liability to Company shall be limited to the lesser of the amount of the wrongfully honored Exception Item or the Company’s actual damages resulting from the FI’s payment of the Exception Item. FI retains the right to assert the Company’s failure to exercise reasonable care under UCC sections 3-406(b) and 4-406(c) as such provisions are codified in the State of Washington, or similar provisions and retains the right to assert that Company has sustained no actual damages because the FI’s wrongful honor of the Exception Item discharged for value an indebtedness of the Company.