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§12A-3-417.
§12A-3-417.
PRESENTMENT WARRANTIES
(a) If an unaccepted draft is presented to the drawee for payment or
acceptance and the drawee pays or accepts the draft, (i) the person
obtaining payment or acceptance, at the time of presentment, and (ii)
a previous transferor of the draft, at the time of transfer, warrant
to the drawee making payment or accepting the draft in good faith
that:
(1) The warrantor is, or was, at the time the warrantor transferred
the draft, a person entitled to enforce the draft or authorized to
obtain payment or acceptance of the draft on behalf of a person
entitled to enforce the draft;
(2) The draft has not been altered; and
(3) The warrantor has no knowledge that the signature of the drawer of
the draft is unauthorized.
(b) A drawee making payment may recover from any warrantor damages for
breach of warranty equal to the amount paid by the drawee less the
amount the drawee received or is entitled to receive from the drawer
because of the payment. In addition, the drawee is entitled to
compensation for expenses and loss of interest resulting from the
breach. The right of the drawee to recover damages under this
subsection is not affected by any failure of the drawee to exercise
ordinary care in making payment. If the drawee accepts the draft,
breach of warranty is a defense to the obligation of the acceptor. If
the acceptor makes payment with respect to the draft, the acceptor is
entitled to recover from any warrantor for breach of warranty the
amounts stated in this subsection.
(c) If a drawee asserts a claim for breach of warranty under
subsection (a) of this section based on an unauthorized indorsement of
the draft or an alteration of the draft, the warrantor may defend by
proving that the indorsement is effective under Section 3-404 or 3-405
of this title or the drawer is precluded under Section 3-406 or 4-406
of this title from asserting against the drawee the unauthorized
indorsement or alteration.
(d) If (i) a dishonored draft is presented for payment to the drawer
or an indorser or (ii) any other instrument is presented for payment
to a party obliged to pay the instrument, and (iii) payment is
received, the following rules apply:
(1) The person obtaining payment and a prior transferor of the
instrument warrant to the person making payment in good faith that the
warrantor is, or was, at the time the warrantor transferred the
instrument, a person entitled to enforce the instrument or authorized
to obtain payment on behalf of a person entitled to enforce the
instrument; and
(2) The person making payment may recover from any warrantor for
breach of warranty an amount equal to the amount paid plus expenses
and loss of interest resulting from the breach.
(e) The warranties stated in subsections (a) and (d) of this section
cannot be disclaimed with respect to checks. Unless notice of a claim
for breach of warranty is given to the warrantor within thirty (30)
days after the claimant has reason to know of the breach and the
identity of the warrantor, the liability of the warrantor under
subsection (b) or (d) of this section is discharged to the extent of
any loss caused by the delay in giving notice of the claim.
(f) A claim for relief for breach of warranty under this section
accrues when the claimant has reason to know of the breach.
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