<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 57A-4-103 - Variation by agreement--Measure of damages--Certain action constituting ordinary care. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2073444Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2073444SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073444CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2073444Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2073444DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2073444Normal-000001 { margin-top: 0; margin-bottom: 0; text-indent: 0.25in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2073444DefaultParagraphFont-000002 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2073444000003 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2073444SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073444SCL-000004 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2073444Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-4-103"><span class="s2073444SENU">57A-4-103</span></a><span xml:space="preserve" class="s2073444SENU">. </span><span class="s2073444CL">Variation by agreement--Measure of damages--Certain action constituting ordinary care.</span></p><p dir="ltr" class="s2073444Normal-000000"><span class="s2073444DefaultParagraphFont">(a) The effect of the provisions of this article may be varied by agreement, but the parties to the agreement cannot disclaim a bank'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's responsibility is to be measured if those standards are not manifestly unreasonable.</span></p><p dir="ltr" class="s2073444Normal-000001"><span class="s2073444DefaultParagraphFont">(b) Federal reserve regulations and operating circulars, clearing</span><span class="s2073444DefaultParagraphFont-000002">-</span><span class="s2073444DefaultParagraphFont">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.</span></p><p dir="ltr" class="s2073444Normal-000001"><span class="s2073444DefaultParagraphFont">(c) Action or nonaction approved by this article 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</span><span class="s2073444DefaultParagraphFont-000002">-</span><span class="s2073444DefaultParagraphFont">house rules and the like or with a general banking usage not disapproved by this chapter, is prima facie the exercise of ordinary care.</span></p><p dir="ltr" class="s2073444Normal-000001"><span class="s2073444DefaultParagraphFont">(d) The specification or approval of certain procedures by this chapter is not disapproval of other procedures that may be reasonable under the circumstances.</span></p><p dir="ltr" class="s2073444Normal-000001"><span class="s2073444DefaultParagraphFont">(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.</span></p><p dir="ltr" class="s2073444Normal"><span xml:space="preserve" class="s2073444000003"> </span></p><p dir="ltr" class="s2073444Normal"><span class="s2073444SCL">Source:</span><span xml:space="preserve" class="s2073444SCL-000004"> SL 1994, ch 368, § 4-103.</span></p></div></body></html>