The liability of paying and returning banks is subject to the following conditions and limitations EXCEPT:
The liability of paying and returning banks is subject to the following conditions and limitations EXCEPT:
The liability of paying and returning banks includes conditions and limitations outlined in options A, B, and C. Option D describes an indemnification agreement rather than a limitation or condition specific to the liability of the paying or returning bank. Therefore, it is the exception to the mentioned conditions and limitations.
The correct answer is D. Paying and returning banks agree to indemnify each Reserve Bank for any loss or expense resulting from the paying or returning bank's lack of authorization or any action by a Reserve Bank within the scope of its authority related to the return of the check or any warranty made by the Reserve Bank. This option does not correctly describe a condition or limitation on