Common use of Wrongful Honor Clause in Contracts

Wrongful Honor. It shall constitute wrongful honor by Bank if Bank pays an Exception Item marked as “return” listed in an Exception Decision delivered prior to the Bank’s designated Cut- off. In the event there is wrongful honor: a) Bank shall be liable to Customer for the lesser of the amount of the wrongfully paid Exception Item or Customer’s actual damages resulting from Bank’s payment of the Exception Item. Bank retains the right to assert the defense that Customer has sustained no actual damages because Bank’s honor of the Exception Item discharged for value an indebtedness of Customer. b) Bank retains the right to assert Customer’s failure to exercise reasonable care under U.C.C. section 3-406(a) and 4- 406 and other Applicable Law in relation to the payment or handling of any Item.

Wrongful Honor. It shall constitute wrongful honor by Bank if Bank pays an Exception Item marked as “return” listed in an Exception Decision delivered prior to the Bank’s designated Cut- Cut-off. In the event there is wrongful honor: a) Bank shall be liable to Customer for the lesser of the amount of the wrongfully paid Exception Item or Customer’s actual damages resulting from Bank’s payment of the Exception Item. Bank retains the right to assert the defense that Customer has sustained no actual damages because Bank’s honor of the Exception Item discharged for value an indebtedness of Customer. b) Bank retains the right to assert Customer’s failure to exercise reasonable care under U.C.C. section 3-406(a) and 4- 406 and other Applicable Law in relation to the payment or handling of any Item.

Wrongful Honor. It shall constitute wrongful honor by Bank if Bank pays an Exception Item marked as “return” listed in an Exception Decision delivered prior to the Bank’s designated Cut- off. In the event there is wrongful honor: a) Bank shall be liable to Customer for the lesser of the amount of the wrongfully paid Exception Item or Customer’s actual damages resulting from Bank’s payment of the Exception Item. Bank retains the right to assert the defense that Customer has sustained no actual damages because Bank’s honor of the Exception Item discharged for value an indebtedness of Customer. b) Bank retains the right to assert Customer’s failure to exercise reasonable care under U.C.C. section 3-406(a) and 4- 4-406 and other Applicable Law in relation to the payment or handling of any Item.