7-3-417
Section 7-3-417 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,...
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7-4-208
Section 7-4-208 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 that pays or accepts 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 purported drawer
of the draft is unauthorized. (b) A drawee making payment may recover from a 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,...
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7-3-501
Section 7-3-501 Presentment. (a) "Presentment" means a demand made by or on
behalf of a person entitled to enforce an instrument (i) to pay the instrument made to the
drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft
payable at a bank, to the bank, or (ii) to accept a draft made to the drawee. (b) The following
rules are subject to Article 4, agreement of the parties, and clearing-house rules and the
like: (1) Presentment may be made at the place of payment of the instrument and must be made
at the place of payment if the instrument is payable at a bank in the United States; may be
made by any commercially reasonable means, including an oral, written, or electronic communication;
is effective when the demand for payment or acceptance is received by the person to whom presentment
is made; and is effective if made to any one of two or more makers, acceptors, drawees, or
other payors. (2) Upon demand of the person to whom presentment is made, the...
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7-3-418
Section 7-3-418 Payment or acceptance by mistake. (a) Except as provided in subsection
(c), if the drawee of a draft pays or accepts the draft and the drawee acted on the mistaken
belief that (i) payment of the draft had not been stopped pursuant to Section 7-4-403
or (ii) the signature of the drawer of the draft was authorized, the drawee may recover the
amount of the draft from the person to whom or for whose benefit payment was made or, in the
case of acceptance, may revoke the acceptance. Rights of the drawee under this subsection
are not affected by failure of the drawee to exercise ordinary care in paying or accepting
the draft. (b) Except as provided in subsection (c), if an instrument has been paid or accepted
by mistake and the case is not covered by subsection (a), the person paying or accepting may,
to the extent permitted by the law governing mistake and restitution, (i) recover the payment
from the person to whom or for whose benefit payment was made or (ii) in the case of...
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7-3-416
Section 7-3-416 Transfer warranties. (a) A person who transfers an instrument for consideration
warrants to the transferee and, if the transfer is by indorsement, 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 recoupment of any party which can be
asserted against the warrantor; and (5) The warrantor has no knowledge of any insolvency proceeding
commenced with respect to the maker or acceptor or, in the case of an unaccepted draft, the
drawer. (b) A person to whom the warranties under subsection (a) are made and who took the
instrument in good faith may recover from the warrantor as damages for breach of warranty
an amount equal to the loss suffered as a result of the breach, but not more than the amount
of the instrument plus expenses and loss of interest incurred as a...
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7-4-207
Section 7-4-207 Transfer warranties. (a) A customer or collecting bank that transfers
an item and receives a settlement or other consideration warrants to the transferee and to
any subsequent collecting bank that: (1) The warrantor is a person entitled to enforce the
item; (2) All signatures on the item are authentic and authorized; (3) The item has not been
altered; (4) The item is not subject to a defense or claim in recoupment (Section 7-3-305(a))
of any party that can be asserted against the warrantor; and (5) The warrantor has no knowledge
of any insolvency proceeding commenced with respect to the maker or acceptor or, in the case
of an unaccepted draft, the drawer. (b) If an item is dishonored, a customer or collecting
bank transferring the item and receiving settlement or other consideration is obliged to pay
the amount due on the item (i) according to the terms of the item at the time it was transferred,
or (ii) if the transfer was of an incomplete item, according to its terms...
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7-3-103
Section 7-3-103 Definitions. (a) In this article: (1) "Acceptor" means a drawee
who has accepted a draft. (2) "Drawee" means a person ordered in a draft to make
payment. (3) "Drawer" means a person who signs or is identified in a draft as a
person ordering payment. (4) "Good faith" means honesty in fact in the conduct or
transaction concerned. (5) "Maker" means a person who signs or is identified in
a note as a person undertaking to pay. (6) "Order" means a written instruction to
pay money signed by the person giving the instruction. The instruction may be addressed to
any person, including the person giving the instruction, or to one or more persons jointly
or in the alternative but not in succession. An authorization to pay is not an order unless
the person authorized to pay is also instructed to pay. (7) "Ordinary care" in the
case of a person engaged in business means observance of reasonable commercial standards,
prevailing in the area in which the person is located, with respect...
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7-3-504
Section 7-3-504 Excused presentment and notice of dishonor. (a) Presentment for payment
or acceptance of an instrument is excused if (i) the person entitled to present the instrument
cannot with reasonable diligence make presentment, (ii) the maker or acceptor has repudiated
an obligation to pay the instrument or is dead or in insolvency proceedings, (iii) by the
terms of the instrument presentment is not necessary to enforce the obligation of indorsers
or the drawer, (iv) the drawer or indorser whose obligation is being enforced has waived presentment
or otherwise has no reason to expect or right to require that the instrument be paid or accepted,
or (v) the drawer instructed the drawee not to pay or accept the draft or the drawee was not
obligated to the drawer to pay the draft. (b) Notice of dishonor is excused if (i) by the
terms of the instrument notice of dishonor is not necessary to enforce the obligation of a
party to pay the instrument, or (ii) the party whose obligation is...
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7-4-104
Section 7-4-104 Definitions and index of definitions. (a) In this article, unless the
context otherwise requires: (1) "Account" means any deposit or credit account with
a bank, including a demand, time, savings, passbook, share draft, or like account, other than
an account evidenced by a certificate of deposit; (2) "Afternoon" means the period
of a day between noon and midnight; (3) "Banking day" means the part of a day on
which a bank is open to the public for carrying on substantially all of its banking functions;
(4) "Clearing house" means an association of banks or other payors regularly clearing
items; (5) "Customer" means a person having an account with a bank or for whom a
bank has agreed to collect items, including a bank that maintains an account at another bank;
(6) "Documentary draft" means a draft to be presented for acceptance or payment
if specified documents, certificated securities (Section 7-8-102) or instructions for
uncertificated securities (Section 7-8-308), or...
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7-3-502
Section 7-3-502 Dishonor. (a) Dishonor of a note is governed by the following rules:
(1) If the note is payable on demand, the note is dishonored if presentment is duly made to
the maker and the note is not paid on the day of presentment. (2) If the note is not payable
on demand and is payable at or through a bank or the terms of the note require presentment,
the note is dishonored if presentment is duly made and the note is not paid on the day it
becomes payable or the day of presentment, whichever is later. (3) If the note is not payable
on demand and paragraph (2) does not apply, the note is dishonored if it is not paid on the
day it becomes payable. (b) Dishonor of an unaccepted draft other than a documentary draft
is governed by the following rules: (1) If a check is duly presented for payment to the payor
bank otherwise than for immediate payment over the counter, the check is dishonored if the
payor bank makes timely return of the check or sends timely notice of dishonor or...
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