Common use of Wrongful Honor Clause in Contracts

Wrongful Honor. It shall constitute wrongful honor by Bank if Bank pays an Exception Item marked as “return” listed in an Exception Decision delivered prior to Bank’s designated Cut-off. In the event there is wrongful honor, Bank shall be liable to Company for the lesser of the amount of the wrongfully paid Exception Item or Company’ actual damages resulting from Bank’s payment of the Exception Item. Bank retains the right to assert the defense that Company have sustained no actual damages because Bank’s honor of the Exception Item discharged for value an indebtedness of Company. Bank retains the right to assert Company’s failure to exercise reasonable care under UCC section 3- 406(a) and 4-406 and other Applicable Law in relation to the payment or handling of any Item.