If a bank improperly refuses to make payment of checks for which its customer has sufficient funds on deposit,it is liable to the drawer for damages sustained by the drawer in consequence of such dishonor.

Question

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This statement accurately reflects the legal principle of a bank's liability for dishonoring checks that its customer has the funds to cover. The Uniform Commercial Code provides for damages to the drawer (the person who wrote the check) in such cases.

If a Bank Improperly Refuses to Make Payment of Checks