                                 CODE OF VIRGINIA

VARIATION BY AGREEMENT; MEASURE OF DAMAGES; ACTION CONSTITUTING ORDINARY CARE
(§ 8.4-103)

a. The effect of the provisions of this title may be varied by agreement but the
parties to the agreement cannot disclaim a bank&#8217;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&#8217;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 nonaction approved by this title or pursuant to federal reserve
regulations or operating circulars is the exercise of ordinary care and, in the
absence of special instructions, action or nonaction consistent with
clearing-house rules and the like or with a general banking usage not
disapproved by this title, prima facie the exercise of ordinary care.

d. The specification or approval of certain procedures by this title 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.

HISTORY: 1964, c. 219; 1992, c. 693.