554.4103 Variation by agreement — measure of damages — action constituting ordinary care. 1. 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 failureto 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 isto be measured if those standards are not manifestly unreasonable. 2. Federal reserve regulations and operating circulars, clearing-house rules, and the like have the effect of agreements under subsection 1, whether or not specifically assented to byall parties interested in items handled. 3. Action or nonaction approved by this Article or pursuant to federal reserve regulations or operating circulars is the exercise of ordinary care and, in the absence of specialinstructions, action or nonaction consistent with clearing-house rules and the like or witha general banking usage not disapproved by this Article, is prima facie the exercise ofordinary care. 4. cialinstructions, action or nonaction consistent with clearing-house rules and the like or witha general banking usage not disapproved by this Article, is prima facie the exercise ofordinary care. 4. The specification or approval of certain procedures by this Article is not disapproval of other procedures that may be reasonable under the circumstances. 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 that could not have been realized by the exerciseof ordinary care. If there is also bad faith it includes any other damages the party suffered asa proximate consequence. [C66, 71, 73, 75, 77, 79, 81, §554.4103]94 Acts, ch 1167, §80, 122 Sat Dec 23 01:57:15 2023 Iowa Code 2024, Section 554.4103 (24, 0)
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