§5009 — Title 12 Banks and Banking | U.S. Code

Summary

If a person handling a substitute check breaks a warranty or does not follow the rules for that check, they must pay the other person. The payment is the smaller of (1) the loss the other person suffered because of the problem or (2) the value of the substitute check. On top of that, the payer must cover interest and related costs, including reasonable lawyer fees. Any money the person already got as a recredit under section 5006 or 5007 reduces what is owed. If the hurt person was partly negligent or acted in bad faith, the payment is cut down in proportion. This does not reduce any rights people have under the Uniform Commercial Code or other federal or state laws.

Title 12, §5009

Banks and Banking — Source: USLM XML via OLRC

(a)(1)Except as provided in section 5005 of this title, any person who, in connection with a substitute check, breaches any warranty under this chapter or fails to comply with any requirement imposed by, or regulation prescribed pursuant to, this chapter with respect to any other person shall be liable to such person in an amount equal to the sum of—

(A)the lesser of—

(i)the amount of the loss suffered by the other person as a result of the breach or failure; or

(ii)the amount of the substitute check; and

(B)interest and expenses (including costs and reasonable attorney’s fees and other expenses of representation) related to the substitute check.

(2)The amount of damages any person receives under paragraph (1), if any, shall be reduced by the amount, if any, that the claimant receives and retains as a recredit under section 5006 or 5007 of this title.

(b)(1)If a person incurs damages that resulted in whole or in part from the negligence or failure of that person to act in good faith, then the amount of any liability due to that person under subsection (a) shall be reduced in proportion to the amount of negligence or bad faith attributable to that person.

(2)Nothing in this subsection reduces the rights of a consumer or any other person under the Uniform Commercial Code or other applicable provision of Federal or State law.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsec. (a)(1), was in the original “this Act”, meaning Pub. L. 108–100, Oct. 28, 2003, 117 Stat. 1177, which is classified generally to this chapter. For complete classification of this Act to the Code, see

Short Title

note set out under section 5001 of this title and Tables.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective at the end of the 12-month period beginning on Oct. 28, 2003, see section 20 of Pub. L. 108–100, set out as a note under section 5001 of this title.

§5009 Measure of damages