§4-103. Variation by agreement; measure of damages; action constituting ordinary care
(a) The effect of the provisions of this Chapter 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 Chapter 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 Chapter, is prima facie the exercise of ordinary care.
(d) The specification or approval of certain procedures by this Chapter 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.
Acts 1992, No. 1133, §4, eff. July 1, 1993; Acts 1993, No. 948, §10, eff. Jan. 1, 1994.
Notes of Decisions
Charles Ragusa & Son v. Cmty. State Bank, 360 So. 2d 231 (La. Ct. App. 1978).
· cites it 2× “LSA-R.S. 10:4-103(1) Compare Hersbergen, The Bank-Customer Relationship Under the Louisiana Commercial Laws, 36 La.”
Knight v. First Guar. Bank, 577 So. 2d 263 (La. Ct. App. 1991).
· cites it 2× “Damages for improper payment of the checks are set forth in LSA-R.S. 10:4-103, which reads as follows: (5) The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount which could not have been realized by the…”
Com. Bank & Trust Co. v. Bank of Louisiana, 487 So. 2d 655 (La. Ct. App. 1986).
“LSA-R.S. 10:4-103 allows the provisions of that chapter of the Commercial Laws to be varied by agreement "except that no agreement can disclaim a bank's responsibility for its own lack of good faith or failure to exercise ordinary care * * *.”
Simmons, Morris & Carroll, LLC v. Capital One, N.A., 144 So. 3d 1207 (La. Ct. App. 2014).
“R.S. 10:4-103(a) provides that while the provisions of the Commercial Laws may be varied by agreement, the parties "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.”
Peak v. Tuscaloosa Com. Bank, 707 So. 2d 59 (La. Ct. App. 1997).
“The extent to which the parties may modify their duties by contract is described in LSA-R.S. 10:4-103, which states, in pertinent part: (a) The effect of the provisions of this Chapter may be varied by agreement, but the parties to the agreement cannot disclaim a bank's…”
Carroll v. Twin City Pontiac Used Cars, Inc., 397 So. 2d 42 (La. Ct. App. 1981).
· cites it 3× “R.S. 10:4-103 imposes upon banks a duty to exercise ordinary care in the handling of commercial paper and provides for damages in the event of the violation of that duty.”
Grodner & Assocs. v. Regions Bank, 338 F. Supp. 3d 488 (M.D. La. 2018).
“" 70 The Groue court also rejected the plaintiff's contention that the bank could not shorten a legal notice or prescriptive period: [B]anks and customers may modify their duties by contract as described in LSA-R.S. 10:4-103. See Peak v. Tuscaloosa Commerce Bank , 96-1258, p.”
Bank One, NA v. Dunn, 927 So. 2d 645 (La. Ct. App. 2006).
· cites it 2× “R.S. 10:4-103 explains, "When it is established that some part or all of the item could not have been collected even by the use of ordinary care the recovery is reduced by the amount that would have been in any event uncollectible.”
Groue v. Capital One, 47 So. 3d 1038 (La. Ct. App. 2010).
· cites it 2× “Additionally, banks and customers may modify their duties by contract as described in LSA-R.S. 10:4-103. See Peak v. Tuscaloosa Commerce Bank, 96-1258, p.”
La. Rev. Stat. § 10:4-103(1): 5 cases
La. Rev. Stat. § 10:4-103(5): 3 cases
Knight v. First Guar. Bank, 577 So. 2d 263 (La. Ct. App. 1991).
“Damages for improper payment of the checks are set forth in LSA-R.S. 10:4-103, which reads as follows: (5) The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount which could not have been realized by the…”
Carroll v. Twin City Pontiac Used Cars, Inc., 397 So. 2d 42 (La. Ct. App. 1981).
“R.S. 10:4-103 imposes upon banks a duty to exercise ordinary care in the handling of commercial paper and provides for damages in the event of the violation of that duty.”
La. Rev. Stat. § 10:4-103(a): 2 cases
Simmons, Morris & Carroll, LLC v. Capital One, N.A., 144 So. 3d 1207 (La. Ct. App. 2014).
“R.S. 10:4-103(a) provides that while the provisions of the Commercial Laws may be varied by agreement, the parties "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.”
Groue v. Capital One, 47 So. 3d 1038 (La. Ct. App. 2010).
“Additionally, banks and customers may modify their duties by contract as described in LSA-R.S. 10:4-103. See Peak v. Tuscaloosa Commerce Bank, 96-1258, p.”
La. Rev. Stat. § 10:4-103(c): 1 case
La. Rev. Stat. § 10:4-103(e): 1 case
Bank One, NA v. Dunn, 927 So. 2d 645 (La. Ct. App. 2006).
“R.S. 10:4-103 explains, "When it is established that some part or all of the item could not have been collected even by the use of ordinary care the recovery is reduced by the amount that would have been in any event uncollectible.”
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