Wrongful Dishonor

Wrongful Dishonor

The failure or refusal by a bank to pay a check that is properly printed and endorsed. If the bank wrongfully dishonors a check and the check writer suffers financial hardship, the writer may sue for damages.
References in periodicals archive ?
The issuing bank was directed to pay the amount of the letter of credit draw, together with interest and the beneficiary's reasonable attorneys' fees incurred in prosecuting its wrongful dishonor claim against the bank.
If the bank rejects a beneficiary's presentation of conforming documents, the bank is in breach of its obligation to pay on the letter of credit and is subject to the beneficiary's assertion of a wrongful dishonor claim.
The court addressed the beneficiary's wrongful dishonor claim against the letter of credit issuing bank.
The Beneficiary moved for summary judgment on its wrongful dishonor claim.
The court noted that the Beneficiary could prove its wrongful dishonor claim by showing an issued and outstanding letter of credit, the Beneficiary's timely presentation of the documents required by the letter of credit, and the issuing bank's refusal to pay the Beneficiary's compliant drawing.
The Beneficiary was also awarded payment of its reasonable attorneys' fees as the prevailing party in its wrongful dishonor action.
The beneficiary sued the issuing bank, claiming wrongful dishonor of the beneficiary's drawing under the letter of credit.
The letter of credit beneficiary had sued the letter of credit issuing bank for wrongful dishonor of the beneficiary's documentary presentation and demand for payment under the letter of credit.
The court also held that Amwest, as the prevailing party in a wrongful dishonor litigation, was entitled to recover its reasonable attorneys' fees and other litigation expenses from Concord, as allowed by UCC Article 5.
Ultimately, a lawsuit was started against Hamilton for wrongful dishonor of the LC.