Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 20

Kendall Yacht Corporation was running into financial problems. Its owners, Lawrence and Linda Kendall, obtained permission from its bank, United California, with which it had corporate accounts, to write overdrafts from this account temporarily. Because the account became so badly overdrawn, the bank dishonored a number of their checks. The Kendalls then brought suit, charging that the bank's wrongful dishonor of the checks damaged their reputation. They offered proof that several civil and criminal proceedings had been brought against them for writing checks against insufficient funds. Do the Kendalls have a legitimate cause of action against United California Bank? (Kendall Yacht Corporation v. United California Bank, 50 Cal. App. 3d 949)