§ 26-1-3.1-416 — Transfer warranties

Indiana § 26-1-3.1-416

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 3.1: Negotiable Instruments

Text

(a) A person who transfers an instrument
for consideration warrants to the transferee and, if the transfer is by
endorsement, 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;
(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; and
(6) with respect to a remotely-created consumer item, the person
on whose account the item is drawn authorized the issuance of the
item in the amount for which the item is drawn.
(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 result of
the breach.
(c) The warranties stated in subsection (a) cannot be disclaimed
with respect to checks. Unless notice of a claim for breach of warranty
is given to the warrantor within thirty (30) days after the claimant has
reason to know of the breach and the identity of the warrantor, the
liability of the warrantor under subsection (b) is discharged to the
extent of any loss caused by the delay in giving notice of the claim.
(d) A cause of action for breach of warranty under this section
accrues when the claimant has reason to know of the breach.

Legislative History

As added by P.L.222-1993, SEC.5. Amended by P.L.135-2009, SEC.9.