§ 4-3-414 — Obligation of drawer

(a) This section does not apply to cashier's
checks or other drafts drawn on the drawer.

(b) If an unaccepted draft is dishonored, the drawer is obliged to pay the
draft (i) according to its terms at the time it was issued or, if not issued, at the time
it first came into possession of a holder, or (ii) if the drawer signed an incomplete
instrument, according to its terms when completed, to the extent stated in sections
4-3-115 and 4-3-407. The obligation is owed to a person entitled to enforce the
draft or to an indorser who paid the draft under section 4-3-415.

(c) If a draft is accepted by a bank, the drawer is discharged, regardless of
when or by whom acceptance was obtained.

(d) If a draft is accepted and the acceptor is not a bank, the obligation of the
drawer to pay the draft if the draft is dishonored by the acceptor is the same as the
obligation of an indorser under section 4-3-415 (a) and (c).

(e) If a draft states that it is drawn without recourse or otherwise disclaims
liability of the drawer to pay the draft, the drawer is not liable under subsection (b)
of this section to pay the draft if the draft is not a check. A disclaimer of the liability
stated in subsection (b) of this section is not effective if the draft is a check.

(f) If (i) a check is not presented for payment or given to a depositary bank
for collection within thirty days after its date, (ii) the drawee suspends payments
after expiration of the thirty-day period without paying the check, and (iii) because
of the suspension of payments, the drawer is deprived of funds maintained with the
drawee to cover payment of the check, the drawer to the extent deprived of funds
may discharge its obligation to pay the check by assigning to the person entitled to
enforce the check the rights of the drawer against the drawee with respect to the
funds.

Legislative History

Source: L. 94: Entire article R&RE, p. 867, � 1, effective January 1, 1995.