PARRIS N. GLENDENING, Governor

Ch. 91

SPECIFICALLY OR BY GENERAL LANGUAGE INDICATING THAT PARTIES WAIVE
DEFENSES BASED ON SURETYSHIP OR IMPAIRMENT OF COLLATERAL

4-101.

This title [ shall be known and] may be cited as Uniform Commercial Code — Bank
Deposits and Collections.

4-102.

[(1)](A) To the extent that items within this title are also within [the scope of]
Titles 3 and 8, they are subject to [ the provisions of] those titles. [ In the event of] IF
THERE IS conflict [the provisions of], this title [govern those of] GOVERNS [Title 3]
TITLE 3, but [ the provisions of] Title 8 [ govern those of] GOVERNS this title.

[(2)] (B) The liability of a bank for action or nonaction with respect to [any] AN
item handled by it for purposes of presentment, [ payment] PAYMENT, or collection is
governed by the law of the place where the bank is located. In the case of action or
nonaction by or at a branch or separate office of a bank, its liability is governed by the law
of the place where the branch or separate office is located.

4-103.

[(1)] (A) The effect of the provisions of this title may be varied by agreement
[except that no agreement can], BUT THE PARTIES TO THE AGREEMENT CANNOT
disclaim a bank's responsibility for its [own] lack of good faith or failure to exercise
ordinary care or [can] limit the measure of damages for [such] THE lack or failure[;
but]. HOWEVER, the parties may DETERMINE by agreement [determine] the standards
by which [ such] THE BANK'S responsibility is to be measured if [ such] THOSE standards
are not manifestly unreasonable.

[(2)](B) Federal reserve regulations and operating [letters] CIRCULARS,
[clearing house] CLEARING-HOUSE rules, and the like[,] have the effect of agreements
under subsection [(1)] (A), whether or not specifically assented to by all parties
interested in items handled.

[(3)] (C) Action or nonaction approved by this title or pursuant to federal reserve
regulations or operating [letters constitutes] CIRCULARS IS the exercise of ordinary care
and, in the absence of special instructions, action or nonaction consistent with [clearing
house] CLEARING-HOUSE rules and the like or with a general banking usage not
disapproved by this title, IS prima facie [constitutes] the exercise of ordinary care.

[(4)] (D) The specification or approval of certain procedures by this title [does
not constitute] IS NOT disapproval of other procedures [which] THAT may be
reasonable under the circumstances.

[(5)] (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 [which] THAT could not have
been realized by the [use] EXERCISE of ordinary care[, and where]. IF there is ALSO
bad faith it includes ANY other damages[, if any, suffered by] the party SUFFERED as a
proximate consequence.

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