(a) If an unaccepted draft is presented to the drawee for payment oracceptance and the drawee pays or accepts the draft, (i) the person obtainingpayment or acceptance, at the time of presentment, and (ii) a previoustransferor of the draft, at the time of transfer, warrant to the draweemaking payment or accepting the draft in good faith that:
(1) the warrantor is, or was, at the time the warrantor transferred thedraft, a person entitled to enforce the draft or authorized to obtain paymentor acceptance of the draft on behalf of a person entitled to enforce thedraft;
(2) the draft has not been altered; and
(3) the warrantor has no knowledge that the signature of the drawer of thedraft is unauthorized.
(b) A drawee making payment may recover from any warrantor damages for breachof warranty equal to the amount paid by the drawee less the amount the draweereceived or is entitled to receive from the drawer because of the payment.In addition, the drawee is entitled to compensation for expenses and loss ofinterest resulting from the breach. The right of the drawee to recoverdamages under this subsection is not affected by any failure of the drawee toexercise ordinary care in making payment. If the drawee accepts the draft,breach of warranty is a defense to the obligation of the acceptor. If theacceptor makes payment with respect to the draft, the acceptor is entitled torecover from any warrantor for breach of warranty the amounts stated in thissubsection.
(c) If a drawee asserts a claim for breach of warranty under subsection (a)based on an unauthorized endorsement of the draft or an alteration of thedraft, the warrantor may defend by proving that the endorsement is effectiveunder § 8.3A-404 or § 8.3A-405 or the drawer is precluded under § 8.3A-406 or§ 8.4-406 from asserting against the drawee the unauthorized endorsement oralteration.
(d) If (i) a dishonored draft is presented for payment to the drawer or anendorser or (ii) any other instrument is presented for payment to a partyobliged to pay the instrument, and (iii) payment is received, the followingrules apply:
(1) The person obtaining payment and a prior transferor of the instrumentwarrant to the person making payment in good faith that the warrantor is, orwas, at the time the warrantor transferred the instrument, a person entitledto enforce the instrument or authorized to obtain payment on behalf of aperson entitled to enforce the instrument.
(2) The person making payment may recover from any warrantor for breach ofwarranty an amount equal to the amount paid plus expenses and loss ofinterest resulting from the breach.
(e) The warranties stated in subsections (a) and (d) cannot be disclaimedwith respect to checks. Unless notice of a claim for breach of warranty isgiven to the warrantor within thirty days after the claimant has reason toknow of the breach and the identity of the warrantor, the liability of thewarrantor under subsection (b) or (d) is discharged to the extent of any losscaused by the delay in giving notice of the claim.
(f) A cause of action for breach of warranty under this section accrues whenthe claimant has reason to know of the breach.
(Code 1950, §§ 6-417, 6-421; 1964, c. 219, § 8.3-417; 1992, c. 693.)
(a) If an unaccepted draft is presented to the drawee for payment oracceptance and the drawee pays or accepts the draft, (i) the person obtainingpayment or acceptance, at the time of presentment, and (ii) a previoustransferor of the draft, at the time of transfer, warrant to the draweemaking payment or accepting the draft in good faith that:
(1) the warrantor is, or was, at the time the warrantor transferred thedraft, a person entitled to enforce the draft or authorized to obtain paymentor acceptance of the draft on behalf of a person entitled to enforce thedraft;
(2) the draft has not been altered; and
(3) the warrantor has no knowledge that the signature of the drawer of thedraft is unauthorized.
(b) A drawee making payment may recover from any warrantor damages for breachof warranty equal to the amount paid by the drawee less the amount the draweereceived or is entitled to receive from the drawer because of the payment.In addition, the drawee is entitled to compensation for expenses and loss ofinterest resulting from the breach. The right of the drawee to recoverdamages under this subsection is not affected by any failure of the drawee toexercise ordinary care in making payment. If the drawee accepts the draft,breach of warranty is a defense to the obligation of the acceptor. If theacceptor makes payment with respect to the draft, the acceptor is entitled torecover from any warrantor for breach of warranty the amounts stated in thissubsection.
(c) If a drawee asserts a claim for breach of warranty under subsection (a)based on an unauthorized endorsement of the draft or an alteration of thedraft, the warrantor may defend by proving that the endorsement is effectiveunder § 8.3A-404 or § 8.3A-405 or the drawer is precluded under § 8.3A-406 or§ 8.4-406 from asserting against the drawee the unauthorized endorsement oralteration.
(d) If (i) a dishonored draft is presented for payment to the drawer or anendorser or (ii) any other instrument is presented for payment to a partyobliged to pay the instrument, and (iii) payment is received, the followingrules apply:
(1) The person obtaining payment and a prior transferor of the instrumentwarrant to the person making payment in good faith that the warrantor is, orwas, at the time the warrantor transferred the instrument, a person entitledto enforce the instrument or authorized to obtain payment on behalf of aperson entitled to enforce the instrument.
(2) The person making payment may recover from any warrantor for breach ofwarranty an amount equal to the amount paid plus expenses and loss ofinterest resulting from the breach.
(e) The warranties stated in subsections (a) and (d) cannot be disclaimedwith respect to checks. Unless notice of a claim for breach of warranty isgiven to the warrantor within thirty days after the claimant has reason toknow of the breach and the identity of the warrantor, the liability of thewarrantor under subsection (b) or (d) is discharged to the extent of any losscaused by the delay in giving notice of the claim.
(f) A cause of action for breach of warranty under this section accrues whenthe claimant has reason to know of the breach.
(Code 1950, §§ 6-417, 6-421; 1964, c. 219, § 8.3-417; 1992, c. 693.)
(a) If an unaccepted draft is presented to the drawee for payment oracceptance and the drawee pays or accepts the draft, (i) the person obtainingpayment or acceptance, at the time of presentment, and (ii) a previoustransferor of the draft, at the time of transfer, warrant to the draweemaking payment or accepting the draft in good faith that:
(1) the warrantor is, or was, at the time the warrantor transferred thedraft, a person entitled to enforce the draft or authorized to obtain paymentor acceptance of the draft on behalf of a person entitled to enforce thedraft;
(2) the draft has not been altered; and
(3) the warrantor has no knowledge that the signature of the drawer of thedraft is unauthorized.
(b) A drawee making payment may recover from any warrantor damages for breachof warranty equal to the amount paid by the drawee less the amount the draweereceived or is entitled to receive from the drawer because of the payment.In addition, the drawee is entitled to compensation for expenses and loss ofinterest resulting from the breach. The right of the drawee to recoverdamages under this subsection is not affected by any failure of the drawee toexercise ordinary care in making payment. If the drawee accepts the draft,breach of warranty is a defense to the obligation of the acceptor. If theacceptor makes payment with respect to the draft, the acceptor is entitled torecover from any warrantor for breach of warranty the amounts stated in thissubsection.
(c) If a drawee asserts a claim for breach of warranty under subsection (a)based on an unauthorized endorsement of the draft or an alteration of thedraft, the warrantor may defend by proving that the endorsement is effectiveunder § 8.3A-404 or § 8.3A-405 or the drawer is precluded under § 8.3A-406 or§ 8.4-406 from asserting against the drawee the unauthorized endorsement oralteration.
(d) If (i) a dishonored draft is presented for payment to the drawer or anendorser or (ii) any other instrument is presented for payment to a partyobliged to pay the instrument, and (iii) payment is received, the followingrules apply:
(1) The person obtaining payment and a prior transferor of the instrumentwarrant to the person making payment in good faith that the warrantor is, orwas, at the time the warrantor transferred the instrument, a person entitledto enforce the instrument or authorized to obtain payment on behalf of aperson entitled to enforce the instrument.
(2) The person making payment may recover from any warrantor for breach ofwarranty an amount equal to the amount paid plus expenses and loss ofinterest resulting from the breach.
(e) The warranties stated in subsections (a) and (d) cannot be disclaimedwith respect to checks. Unless notice of a claim for breach of warranty isgiven to the warrantor within thirty days after the claimant has reason toknow of the breach and the identity of the warrantor, the liability of thewarrantor under subsection (b) or (d) is discharged to the extent of any losscaused by the delay in giving notice of the claim.
(f) A cause of action for breach of warranty under this section accrues whenthe claimant has reason to know of the breach.
(Code 1950, §§ 6-417, 6-421; 1964, c. 219, § 8.3-417; 1992, c. 693.)
