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Illinois Compiled Statutes

810 ILCS 5/4-103 (2026)

Variation by agreement; measure of damages; action constituting ordinary care

✓ current as of May 2026
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(810 ILCS 5/4-103) (from Ch. 26, par. 4-103)
    Sec. 4-103. Variation by agreement; measure of damages; action constituting ordinary care.
    (a) The effect of the provisions of this Article may be varied by agreement, but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, the parties may determine by agreement the standards by which the bank's responsibility is to be measured if those standards are not manifestly unreasonable.
    (b) Federal Reserve regulations and operating circulars, clearing-house rules, and the like have the effect of agreements under subsection (a), whether or not specifically assented to by all parties interested in items handled.
    (c) Action or non-action approved by this Article or pursuant to Federal Reserve regulations or operating circulars is the exercise of ordinary care and, in the absence of special instructions, action or non-action consistent with clearing-house rules and the like or with a general banking usage not disapproved by this Article, is prima facie the exercise of ordinary care.
    (d) The specification or approval of certain procedures by this Article is not disapproval of other procedures that may be reasonable under the circumstances.
    (e) The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount that could not have been realized by the exercise of ordinary care. If there is also bad faith it includes any other damages the party suffered as a proximate consequence.
(Source: P.A. 87-582; 87-1135.)

    
Notes of Decisions
Cited in 6 cases, 2002–2015 · leading case: Dixon, Laukitis & Downing, P.C. v. Busey Bank, 2013 IL App (3d) 120832 (Ill. App. Ct. 2013).
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Dixon, Laukitis & Downing, P.C. v. Busey Bank, 2013 IL App (3d) 120832 (Ill. App. Ct. 2013). · cites it 2× “810 ILCS 5/4-103(a) (West 2010); Scott Stainless Steel, Inc.”
Proin S.A. v. LaSalle Bank, N.A., 223 F. Supp. 2d 960 (N.D. Ill. 2002). “) Proin filed suit in September 2001, alleging breach of contract and lack of ordinary care in handling the documentary collection in violation of the Illinois statutory equivalent of the UCC, 810 ILCS 5/4-103(e). LaSalle, who had retained a security interest and lien on Food…”
Aliaga Med. Ctr., S.C. v. Harris Bank N.A., 2014 IL App (1st) 133645 (Ill. App. Ct. 2015). · cites it 2× “” 810 ILCS 5/4-103(a) (West 2012). Here, the parties entered into an agreement, which included specific notice and fee requirements for stopping payment of a check.”
Aliaga Med. Ctr., S.C. v. Harris Bank N.A., 2014 IL App (1st) 133645 (Ill. App. Ct. 2014). “” 810 ILCS 5/4-103(a) (West 2012). As such, the Napleton court found that it is “clearly permissible” to enforce a shorter notification timeframe established by a bank customer’s account agreement with its bank.”
Napleton v. Great Lakes Bank (Ill. App. Ct. 2011). · cites it 2× “810 ILCS 5/4-103(a) (West 2008). See also Mitchell Buick & Oldsmobile Sales, Inc.”
Cont'l Cas. Co. v. Am. Nat'l Bank & Trust Co. (Ill. App. Ct. 2002). “" 810 ILCS 5/4-103(a) (West 1996). Thus, the common-law duty of ordinary care underlying GAI's breach of contract claim is not a duty that is foreign to the UCC.”
— 810 ILCS 5/4-103(a) — 5 cases
Dixon, Laukitis & Downing, P.C. v. Busey Bank, 2013 IL App (3d) 120832 (Ill. App. Ct. 2013). “810 ILCS 5/4-103(a) (West 2010); Scott Stainless Steel, Inc.”
Aliaga Med. Ctr., S.C. v. Harris Bank N.A., 2014 IL App (1st) 133645 (Ill. App. Ct. 2015). “” 810 ILCS 5/4-103(a) (West 2012). Here, the parties entered into an agreement, which included specific notice and fee requirements for stopping payment of a check.”
Aliaga Med. Ctr., S.C. v. Harris Bank N.A., 2014 IL App (1st) 133645 (Ill. App. Ct. 2014). “” 810 ILCS 5/4-103(a) (West 2012). As such, the Napleton court found that it is “clearly permissible” to enforce a shorter notification timeframe established by a bank customer’s account agreement with its bank.”
Napleton v. Great Lakes Bank (Ill. App. Ct. 2011). “810 ILCS 5/4-103(a) (West 2008). See also Mitchell Buick & Oldsmobile Sales, Inc.”
Cont'l Cas. Co. v. Am. Nat'l Bank & Trust Co. (Ill. App. Ct. 2002). “" 810 ILCS 5/4-103(a) (West 1996). Thus, the common-law duty of ordinary care underlying GAI's breach of contract claim is not a duty that is foreign to the UCC.”
— 810 ILCS 5/4-103(e) — 1 case
Proin S.A. v. LaSalle Bank, N.A., 223 F. Supp. 2d 960 (N.D. Ill. 2002). “) Proin filed suit in September 2001, alleging breach of contract and lack of ordinary care in handling the documentary collection in violation of the Illinois statutory equivalent of the UCC, 810 ILCS 5/4-103(e). LaSalle, who had retained a security interest and lien on Food…”
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