N.Y. Uniform Commercial Code Law § 4-402: Bank's Liability to Customer for Wrongful Dishonor

Section 4--402. Bank's Liability to Customer for Wrongful Dishonor.

A payor bank is liable to its customer for damages proximately caused

by the wrongful dishonor of an item. When the dishonor occurs through

mistake liability is limited to actual damages proved. If so proximately

caused and proved damages 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.