New Jersey Statutes 12A:3-417. Presentment warranties
Terms Used In New Jersey Statutes 12A:3-417
- Acceptor: means a drawee who has accepted a draft. See New Jersey Statutes 12A:3-103
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Drawee: means a person ordered in a draft to make payment. See New Jersey Statutes 12A:3-103
- Drawer: means a person who signs or is identified in a draft as a person ordering payment. See New Jersey Statutes 12A:3-103
- Good faith: means honesty in fact and the observance of reasonable commercial standards of fair dealing. See New Jersey Statutes 12A:3-103
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Party: means a party to an instrument. See New Jersey Statutes 12A:3-103
- person: includes corporations, companies, associations, societies, firms, partnerships and joint stock companies as well as individuals, unless restricted by the context to an individual as distinguished from a corporate entity or specifically restricted to one or some of the above enumerated synonyms and, when used to designate the owner of property which may be the subject of an offense, includes this State, the United States, any other State of the United States as defined infra and any foreign country or government lawfully owning or possessing property within this State. See New Jersey Statutes 1:1-2
(1) the warrantor is, or was, at the time the warrantor transferred the draft, a person entitled to enforce the draft or authorized to obtain payment or acceptance of the draft on behalf of a person entitled to enforce the draft;
(2) the draft has not been altered; and
(3) the warrantor has no knowledge that the signature of the drawer of the draft is unauthorized.
b. A drawee making payment may recover from any warrantor damages for breach of warranty equal to the amount paid by the drawee less the amount the drawee received or is entitled to receive from the drawer because of the payment. In addition, the drawee is entitled to compensation for expenses and loss of interest resulting from the breach. The right of the drawee to recover damages under this subsection is not affected by any failure of the drawee to exercise ordinary care in making payment. If the drawee accepts the draft, breach of warranty is a defense to the obligation of the acceptor. If the acceptor makes payment with respect to the draft, the acceptor is entitled to recover from any warrantor for breach of warranty the amounts stated in this subsection.
c. If a drawee asserts a claim for breach of warranty under subsection a. of this section based on an unauthorized indorsement of the draft or an alteration of the draft, the warrantor may defend by proving that the indorsement is effective under 12A:3-404 or 12A:3-405 or the drawer is precluded under 12A:3-406 or 12A:4-406 from asserting against the drawee the unauthorized indorsement or alteration.
d. If a dishonored draft is presented for payment to the drawer or an indorser or any other instrument is presented for payment to a party obliged to pay the instrument, and payment is received, the following rules apply:
(1) The person obtaining payment and a prior transferor of the instrument warrant to the person making payment in good faith that the warrantor is, or was, at the time the warrantor transferred the instrument, a person entitled to enforce the instrument or authorized to obtain payment on behalf of a person entitled to enforce the instrument.
(2) The person making payment may recover from any warrantor for breach of warranty an amount equal to the amount paid plus expenses and loss of interest resulting from the breach.
e. The warranties stated in subsections a. and d. 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 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. or d. of this section is discharged to the extent of any loss caused by the delay in giving notice of the claim.
f. A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.
L.1995,c.28,s.1.