(a) Except as otherwise provided in this title, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft.
(b) A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. Liability is limited to actual damages proved and 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.
(c) A payor bank's determination of the customer's account balance on which a decision to dishonor for insufficiency of available funds is based may be made at any time between the time the item is received by the payor bank and the time that the payor bank returns the item or gives notice in lieu of return, and no more than one determination need be made. If, at the election of the payor bank, a subsequent balance determination is made for the purpose of reevaluating the bank's decision to dishonor the item, the account balance at that time is determinative of whether a dishonor for insufficiency of available funds is wrongful.
Structure Maryland Statutes
Title 4 - Bank Deposits and Collections
Subtitle 4 - Relationship Between Payor Bank and Its Customer
Section 4-401 - When Bank May Charge Customer's Account
Section 4-403 - Customer's Right to Stop Payment; Burden of Proof of Loss
Section 4-404 - Bank Not Obligated to Pay Check More Than Six Months Old
Section 4-405 - Death or Incompetence of Customer
Section 4-407 - Payor Bank's Right to Subrogation on Improper Payment