Wrongful Dishonor

AAA

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 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.

RELATED TERMS
  1. Uniform Commercial Code

    A standard set of business laws that regulate financial contracts. ...
  2. Demand Draft

    A method used by individuals to make transfer payments from one ...
  3. Bank Draft

    A type of check where the payment is guaranteed to be available ...
  4. Check

    A written, dated and signed instrument that contains an unconditional ...
  5. Altered Check

    A check or another negotiable instrument that has been materially ...
  6. Automatic Bill Payment

    A money transfer scheduled on a predetermined date to pay a recurring ...
RELATED FAQS
  1. What months of the year typically have the highest float?

    Float creates a temporary distortion in a nation's money supply by counting the same funds twice. This occurs when checks ... Read Full Answer >>
  2. In what ways has technology helped to reduce float?

    Technological advances have reduced float by enabling faster processing of checks. Funds now spend less time waiting for ... Read Full Answer >>
  3. Why does float usually increase at the beginning of the week?

    Float is created by check-processing backlogs in the financial system. Checks await processing from one checking account ... Read Full Answer >>
  4. How does your checking account affect your credit score?

    Your credit report provides a snapshot for prospective lenders, landlords and employers of how you handle credit. For any ... Read Full Answer >>
  5. What should you bring to a bank to open a checking account?

    Opening a checking account is a fairly simple process. You choose a bank, show up, fill out some paperwork, provide some ... Read Full Answer >>
  6. What are the pros and cons of online checking accounts?

    Online banking offers a convenient alternative to keeping your checking account with a brick-and-mortar bank. With an online ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  2. Savings

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.
  3. Savings

    Expat's Guide To Bank Accounts In The Philippines

    You'll need an ACR I-Card and other documents to open a bank account in the Philippines. Be sure to read the fine print about how much money is insured.
  4. Credit & Loans

    The Pros & Cons Of Personal Loans vs. Credit Cards

    One is not like the other. We help you decide where to borrow money from.
  5. Budgeting

    Should You Pay Your Bills On Autopilot?

    Now that you can sign up to have your bills paid automatically online, it it a smart way to make your life more efficient? A look at the pros and cons.
  6. Entrepreneurship

    Technology, The Biggest Threat For Big Banks

    Technology is the biggest threat to the future of big banks as we know them.
  7. Personal Finance

    4 Tips To Cut Your Monthly Bank Fees

    We asked banking professions to share their biggest tips for tackling bank fees, and hopefully save more even before spring hits.
  8. Savings

    2015's Top Checking Account Promotions

    Open a checking account in 2015 and the bank could give you a cash bonus. Check out these top offers.
  9. Savings

    Best Checking Accounts For Couples

    Being a couple, especially if you both have jobs, can help you qualify for benefits and fee waivers that would be tougher to get on just one salary.
  10. Savings

    Mortgage Faceoff: Bank of America Vs. Wells Fargo

    Which bank offers the better mortgage deal? Here's how they compare on two popular types of mortgage.

You May Also Like

Hot Definitions
  1. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  2. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  3. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  4. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
  5. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
Trading Center