§ 41-04-21 — (4-209) Encoding and retention warranties

1. A person that encodes information on or with respect to an item after issue warrants to
any subsequent collecting bank and to the payor bank or other payor that the
information is correctly encoded. If the customer of a depositary bank encodes, that
bank also makes the warranty.
2. A person that undertakes to retain an item under an electronic presentment agreement
warrants to any subsequent collecting bank and to the payor bank or other payor that
retention and presentment of the item comply with the agreement. If a customer of a
depositary bank undertakes to retain an item, that bank also makes this warranty.
3. A person to whom warranties are made under this section and who took the item 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, plus expenses and loss of
interest incurred as a result of the breach.