New Jersey § 12a:4-402

§ 12a:4-402.

a. Except as otherwise provided in this chapter, a payor bank wrongfully dishonors

an item if it dishonors an item that is properly payable, but a bank may dishonor

an item that would create an overdraft unless it has agreed to pay the overdraft. b. A payor bank is liable to its customer for damages proximately caused by the wrongful

dishonor of an item. Liability is limited to actual damages proved and may include damages for an arrest

or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor

is a question of fact to be determined in each case. c. A payor bank's determination of the customer's account balance on which a decision

to dishonor for insufficiency of available funds is based may be made at any time

between the time the item is received by the payor bank and the time that the payor

bank returns the item or gives notice in lieu of return, and no more than one determination

need be made. If, at the election of the payor bank, a subsequent balance determination is made

for the purpose of reevaluating the bank's decision to dishonor the item, the account

balance at that time is determinative of whether a dishonor for insufficiency of available

funds is wrongful.