§ 4-3-415 — Obligation of indorser

(a) Subject to subsections (b), (c), (d) and (e)
of this section and to section 4-3-419 (d), if an instrument is dishonored, an indorser
is obliged to pay the amount due on the instrument (i) according to the terms of the
instrument at the time it was indorsed, or (ii) if the indorser indorsed an incomplete
instrument, according to its terms when completed, to the extent stated in sections
4-3-115 and 4-3-407. The obligation of the indorser is owed to a person entitled to
enforce the instrument or to a subsequent indorser who paid the instrument under
this section.

(b) If an indorsement states that it is made without recourse or otherwise
disclaims liability of the indorser, the indorser is not liable under subsection (a) of
this section to pay the instrument.

(c) If notice of dishonor of an instrument is required by section 4-3-503 and
notice of dishonor complying with that section is not given to an indorser, the
liability of the indorser under subsection (a) of this section is discharged.

(d) If a draft is accepted by a bank after an indorsement is made, the liability
of the indorser under subsection (a) of this section is discharged.

(e) If an indorser of a check is liable under subsection (a) of this section and
the check is not presented for payment, or given to a depositary bank for collection,
within thirty days after the day the indorsement was made, the liability of the
indorser under subsection (a) of this section is discharged.

Legislative History

Source: L. 94: Entire article R&RE, p. 868, � 1, effective January 1, 1995.