(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 drawee thatpays or accepts 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 purported drawerof the draft is unauthorized.
(b) A drawee making payment may recover from a 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 a lossof interest 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(i) breach of warranty is a defense to the obligation of the acceptor, and(ii) if the acceptor makes payment with respect to the draft, the acceptor isentitled to recover from a warrantor for breach of warranty the amountsstated in this subsection.
(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 item is presented for payment to a party obligedto pay the item, and the item is paid, the person obtaining payment and aprior transferor of the item warrant to the person making payment in goodfaith that the warrantor is, or was, at the time the warrantor transferredthe item, a person entitled to enforce the item or authorized to obtainpayment on behalf of a person entitled to enforce the item. The personmaking payment may recover from any warrantor for breach of warranty anamount equal to the amount paid plus expenses and loss of interest resultingfrom 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 warrantor isdischarged to the extent of any loss caused by the delay in giving notice ofthe claim.
(f) A cause of action for breach of warranty under this section accrues whenthe claimant has reason to know of the breach.
(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 drawee thatpays or accepts 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 purported drawerof the draft is unauthorized.
(b) A drawee making payment may recover from a 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 a lossof interest 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(i) breach of warranty is a defense to the obligation of the acceptor, and(ii) if the acceptor makes payment with respect to the draft, the acceptor isentitled to recover from a warrantor for breach of warranty the amountsstated in this subsection.
(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 item is presented for payment to a party obligedto pay the item, and the item is paid, the person obtaining payment and aprior transferor of the item warrant to the person making payment in goodfaith that the warrantor is, or was, at the time the warrantor transferredthe item, a person entitled to enforce the item or authorized to obtainpayment on behalf of a person entitled to enforce the item. The personmaking payment may recover from any warrantor for breach of warranty anamount equal to the amount paid plus expenses and loss of interest resultingfrom 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 warrantor isdischarged to the extent of any loss caused by the delay in giving notice ofthe claim.
(f) A cause of action for breach of warranty under this section accrues whenthe claimant has reason to know of the breach.
(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 drawee thatpays or accepts 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 purported drawerof the draft is unauthorized.
(b) A drawee making payment may recover from a 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 a lossof interest 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(i) breach of warranty is a defense to the obligation of the acceptor, and(ii) if the acceptor makes payment with respect to the draft, the acceptor isentitled to recover from a warrantor for breach of warranty the amountsstated in this subsection.
(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 item is presented for payment to a party obligedto pay the item, and the item is paid, the person obtaining payment and aprior transferor of the item warrant to the person making payment in goodfaith that the warrantor is, or was, at the time the warrantor transferredthe item, a person entitled to enforce the item or authorized to obtainpayment on behalf of a person entitled to enforce the item. The personmaking payment may recover from any warrantor for breach of warranty anamount equal to the amount paid plus expenses and loss of interest resultingfrom 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 warrantor isdischarged to the extent of any loss caused by the delay in giving notice ofthe claim.
(f) A cause of action for breach of warranty under this section accrues whenthe claimant has reason to know of the breach.
