404.402 Bank's liability to customer for wrongful dishonor; time of determining insufficiency of account.
(1) Except as otherwise provided in this chapter, a payer 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.
(2) A payer 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.
(3) A payer 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 payer bank and the time that the payer 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 payer 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.
History: 1995 a. 449.
Absent an agreement to the contrary, a bank retains discretion to dishonor a check creating an overdraft even when it has previously honored that customer's overdrafts. Schaller v. Marine National Bank, 131 Wis. 2d 389, 388 N.W.2d 645 (Ct. App. 1986).
Structure Wisconsin Statutes & Annotations
Wisconsin Statutes & Annotations
Chapter 404 - Uniform commercial code — bank deposits and collections.
404.103 - Variation by agreement; measure of damages; action constituting ordinary care.
404.104 - Definitions and index of definitions.
404.106 - Payable through or payable at bank; collecting bank.
404.107 - Separate office of a bank.
404.108 - Time of receipt of items.
404.110 - Electronic presentment.
404.111 - Statute of limitations.
404.202 - Responsibility for collection or return; when action timely.
404.203 - Effect of instructions.
404.204 - Methods of sending and presenting; sending directly to payer bank.
404.205 - Depositary bank holder of unendorsed item.
404.206 - Transfer between banks.
404.207 - Transfer warranties.
404.208 - Presentment warranties.
404.209 - Encoding and retention warranties.
404.210 - Security interest of collecting bank in items, accompanying documents and proceeds.
404.211 - When bank gives value for purposes of holder in due course.
404.213 - Medium and time of settlement by bank.
404.214 - Right of charge-back or refund; liability of collecting bank; return of item.
404.216 - Insolvency and preference.
404.302 - Payer bank's responsibility for late return of item.
404.401 - When bank may charge customer's account.
404.403 - Customer's right to stop payment; burden of proof of loss.
404.404 - Bank not obligated to pay check more than 6 months old.
404.405 - Death or incompetence of customer.
404.406 - Customer's duty to discover and report unauthorized signature or alteration.
404.407 - Payer bank's right to subrogation on improper payment.
404.502 - Presentment of “on arrival" drafts.
404.504 - Privilege of presenting bank to deal with goods; security interest for expenses.