Title 11, Chapter 4, Section 402
Bank's liability to customer for wrongful dishonor; time of determining insufficiency of account.
(a) Except as otherwise provided in this article, 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.