{"data":{"id":"us-ky/krs-355.4-402","jurisdiction":"us-ky","citation":"KRS 355.4-402","heading":"Bank's liability to customer for wrongful dishonor -- Time of","body":"determining insufficiency of account.\n(1) Except as otherwise provided in this article, a payor bank wrongfully dishonors an\nitem if it dishonors an item that is properly payable, but a b ank may dishonor an\nitem that would create an overdraft unless it has agreed to pay the overdraft.\n(2) A payor bank is liable to its customer for damages proximately caused by the\nwrongful dishonor of an item. Liability is limited to actual damages proved and may\ninclude damages for an arrest or prosecution of the customer or other consequential\ndamages. Whether any consequential damages are proximately caused by the\nwrongful dishonor is a question of fact to be determined in each case.\n(3) A payor bank's determination of the customer's account balance on which a decision\nto dishonor for insufficiency of available funds is based may be made at any time\nbetween the time the item is received by the payor bank and the time that the payor\nbank returns the item o r gives notice in lieu of return, and no more than one\ndetermination need be made. If, at the election of the payor bank, a subsequent\nbalance determination is made for the purpose of reevaluating the bank's decision to\ndishonor the item, the account balan ce at that time is determinative of whether a\ndishonor for insufficiency of available funds is wrongful.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33545","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:45Z","sha256":"6abbbbb0f34f6793a0ff7f628f446f5342b439e99e2f853cfe2cab4550f6ec1e","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.4-401","next":"us-ky/krs-355.4-403"},"notice":"GroundRules: Original legal text. Not legal advice."}