Wrongful Dishonor

Dictionary Says

Definition of 'Wrongful Dishonor'


A bank's failure to honor a valid negotiable instrument such as a cheque or draft that has been presented to it for payment. If the cheque is valid and there are sufficient funds in the account to cover it, a bank's failure to honor it within the time period stipulated by the Uniform Commercial Code would constitute wrongful dishonor.
Investopedia Says

Investopedia explains 'Wrongful Dishonor'


A payor bank is liable to its customer for damages caused by wrongful dishonor of an instrument. Liability is limited to actual damages proved and may include potential consequential damages.
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