Ohio Code 1303.56 – Transfer warranties – UCC 3-416
(A) A person who transfers an instrument for consideration warrants all of the following to the transferee and, if the transfer is by indorsement, to any subsequent transferee:
Terms Used In Ohio Code 1303.56
- Acceptor: means a drawee who has accepted a draft. See Ohio Code 1303.01
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Drawer: means a person who signs or is identified in a draft as a person ordering payment. See Ohio Code 1303.01
- Maker: means a person who signs or is identified in a note as a person undertaking to pay. See Ohio Code 1303.01
- Party: means a party to an instrument. See Ohio Code 1303.01
- Person: includes an individual, corporation, business trust, estate, trust, partnership, and association. See Ohio Code 1.59
(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.
(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 set forth in division (A) of this section 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 set forth in division (A) of this section cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within thirty days after the claimant has reason to know of the breach and the identity of the warrantor, the liability of the warrantor under division (B) of this section 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.