Wisconsin Statutes 404.402 – Bank’s liability to customer for wrongful dishonor; time of determining insufficiency of account
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Terms Used In Wisconsin Statutes 404.402
- Account: means any deposit or credit account with a bank, including a demand, time, savings, passbook, share draft or like account, other than an account evidenced by a certificate of deposit. See Wisconsin Statutes 404.104
- Arrest: Taking physical custody of a person by lawful authority.
- Customer: means a person having an account with a bank or for whom a bank has agreed to collect items, including a bank that maintains an account at another bank. See Wisconsin Statutes 404.104
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See Wisconsin Statutes 404.104
(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.