400.3-416. (a) A person who transfers an instrument forconsideration warrants to the transferee and, if the transfer is byendorsement, to any subsequent transferee that:
(1) the warrantor is a person entitled to enforce the instrument;
(2) all signatures on the instrument are authentic and authorized;
(3) the instrument has not been altered;
(4) the instrument is not subject to a defense or claim in recoupmentof any party which can be asserted against the warrantor;
(5) the warrantor has no knowledge of any insolvency proceedingcommenced with respect to the maker or acceptor or, in the case of anunaccepted draft, the drawer; and
(6) If the instrument is a demand draft, creation of the instrumentaccording to the terms on its face was authorized by the person identifiedas drawer. Nothing in this section shall be construed to impair the rightsof the drawer against the drawee.
(b) A person to whom the warranties under subsection (a) are made andwho took the instrument in good faith may recover from the warrantor asdamages for breach of warranty an amount equal to the loss suffered as aresult of the breach, but not more than the amount of the instrument plusexpenses and loss of interest incurred as a result of the breach.
(c) The warranties stated in subsection (a) cannot be disclaimed withrespect to checks. Unless notice of a claim for breach of warranty isgiven to the warrantor within 30 days after the claimant has reason to knowof the breach and the identity of the warrantor, the liability of thewarrantor under subsection (b) is discharged to the extent of any losscaused by the delay in giving notice of the claim.
(d) A cause of action for breach of warranty under this sectionaccrues when the claimant has reason to know of the breach.
(e) If the warranty in paragraph (6) of subsection (a) is not givenby a transferor under applicable conflict of law rules, then the warrantyis not given to that transferor when that transferor is a transferee.
400.3-416. (a) A person who transfers an instrument forconsideration warrants to the transferee and, if the transfer is byendorsement, to any subsequent transferee that:
(1) the warrantor is a person entitled to enforce the instrument;
(2) all signatures on the instrument are authentic and authorized;
(3) the instrument has not been altered;
(4) the instrument is not subject to a defense or claim in recoupmentof any party which can be asserted against the warrantor;
(5) the warrantor has no knowledge of any insolvency proceedingcommenced with respect to the maker or acceptor or, in the case of anunaccepted draft, the drawer; and
(6) If the instrument is a demand draft, creation of the instrumentaccording to the terms on its face was authorized by the person identifiedas drawer. Nothing in this section shall be construed to impair the rightsof the drawer against the drawee.
(b) A person to whom the warranties under subsection (a) are made andwho took the instrument in good faith may recover from the warrantor asdamages for breach of warranty an amount equal to the loss suffered as aresult of the breach, but not more than the amount of the instrument plusexpenses and loss of interest incurred as a result of the breach.
(c) The warranties stated in subsection (a) cannot be disclaimed withrespect to checks. Unless notice of a claim for breach of warranty isgiven to the warrantor within 30 days after the claimant has reason to knowof the breach and the identity of the warrantor, the liability of thewarrantor under subsection (b) is discharged to the extent of any losscaused by the delay in giving notice of the claim.
(d) A cause of action for breach of warranty under this sectionaccrues when the claimant has reason to know of the breach.
(e) If the warranty in paragraph (6) of subsection (a) is not givenby a transferor under applicable conflict of law rules, then the warrantyis not given to that transferor when that transferor is a transferee.
400.3-416. (a) A person who transfers an instrument forconsideration warrants to the transferee and, if the transfer is byendorsement, to any subsequent transferee that:
(1) the warrantor is a person entitled to enforce the instrument;
(2) all signatures on the instrument are authentic and authorized;
(3) the instrument has not been altered;
(4) the instrument is not subject to a defense or claim in recoupmentof any party which can be asserted against the warrantor;
(5) the warrantor has no knowledge of any insolvency proceedingcommenced with respect to the maker or acceptor or, in the case of anunaccepted draft, the drawer; and
(6) If the instrument is a demand draft, creation of the instrumentaccording to the terms on its face was authorized by the person identifiedas drawer. Nothing in this section shall be construed to impair the rightsof the drawer against the drawee.
(b) A person to whom the warranties under subsection (a) are made andwho took the instrument in good faith may recover from the warrantor asdamages for breach of warranty an amount equal to the loss suffered as aresult of the breach, but not more than the amount of the instrument plusexpenses and loss of interest incurred as a result of the breach.
(c) The warranties stated in subsection (a) cannot be disclaimed withrespect to checks. Unless notice of a claim for breach of warranty isgiven to the warrantor within 30 days after the claimant has reason to knowof the breach and the identity of the warrantor, the liability of thewarrantor under subsection (b) is discharged to the extent of any losscaused by the delay in giving notice of the claim.
(d) A cause of action for breach of warranty under this sectionaccrues when the claimant has reason to know of the breach.
(e) If the warranty in paragraph (6) of subsection (a) is not givenby a transferor under applicable conflict of law rules, then the warrantyis not given to that transferor when that transferor is a transferee.
