A New Jersey collection attorney can explain that a check is dishonored when the bank timely returns a check after it is presented to payment or if the bank sends prompt notice of the dishonor.
Likelihood of Dishonored Checks
Our New Jersey collection attorney can explain that dishonored checks comprise a small proportion of the checks that banks handle on a daily basis. Many checks that are originally dishonored wind up being paid eventually.
A New Jersey collection attorney can explain that a dishonored check can cause several potential legal issues. Most of these issues are discussed with the banking agreement that the customer signs. When a check is dishonored, customers may wonder if the bank is liable for wrongful dishonor. There are also special rules that the bank must follow regarding the notice that it provides after dishonor and the bank’s responsibilities and rights regarding how to return and charge back the check.
As part of the written agreement between the bank and the customer or as an implied agreement, the bank agrees to honor checks that have been properly drafted against the account so long as the account owner possess sufficient funds in the account to cover the payment. However, if the bank wrongfully dishonors a check, it is liable for those damages that are proximately caused by such dishonor. However, if the dishonor was a result of a mistake, the bank’s liability is equal only to those actual damages that the account owner can prove. Such damages may include those amounts incurred because of the account owner’s arrest or prosecution. The source of law that provides for the process involved with dishonored checks is the Uniform Commercial Code. This set of laws does not prohibit the request and award for punitive damages.
Legal Assistance from a New Jersey Collection Attorney
If you have any questions about dishonored checks, contact a New Jersey collection attorney from Snellings Law LLC by calling (973) 265-6100.