Utah Code 70A-4-207. Transfer warranties
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(1) A customer or collecting bank that transfers an item and receives a settlement or other consideration warrants to the transferee and to any subsequent collecting bank that:
Terms Used In Utah Code 70A-4-207
- Customer: means a person having an account with a bank or for whom a bank has agreed to collect items including a bank that maintains an account at another bank. See Utah Code 70A-4-104
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Draft: means a draft as defined in Section
70A-3-104 or an item, other than an instrument, that is an order. See Utah Code 70A-4-104 - Equal: means , with respect to biological sex, of the same value. See Utah Code 68-3-12.5
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See Utah Code 70A-4-104
- 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.
- Person: means :(24)(a) an individual;(24)(b) an association;(24)(c) an institution;(24)(d) a corporation;(24)(e) a company;(24)(f) a trust;(24)(g) a limited liability company;(24)(h) a partnership;(24)(i) a political subdivision;(24)(j) a government office, department, division, bureau, or other body of government; and(24)(k) any other organization or entity. See Utah Code 68-3-12.5
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(1)(a) the warrantor is a person entitled to enforce the item;(1)(b) all signatures on the item are authentic and authorized;(1)(c) the item has not been altered;(1)(d) the item is not subject to a defense or claim in recoupment, Section70A-3-305 , of any party that can be asserted against the warrantor;(1)(e) 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(1)(f) if the item is a demand draft, creation of the item according to the terms on its face was authorized by the person identified as drawer.
(2) If an item is dishonored, a customer or collecting bank transferring the item and receiving settlement or other consideration is obliged to pay the amount due on the item according to the terms of the item at the time it was transferred, or if the transfer was of an incomplete item, according to its terms when completed as stated in Sections 70A-3-115 and 70A-3-407 . The obligation of a transferor is owed to the transferee and to any subsequent collecting bank that takes the item in good faith. A transferor cannot disclaim its obligation under this subsection by an indorsement stating that it is made “without recourse” or otherwise disclaiming liability.
(3) A person to whom the warranties under Subsection (1) are made 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, but not more than the amount of the item plus expenses and loss of interest incurred as a result of the breach.
(4) The warranties stated in Subsection (1) 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 warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim.
(5) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.
(6) If the warranty in Subsection (1)(f) is not given by a transferor or collecting bank under applicable conflict of law rules, the warranty is not given to that transferor when that transferor is a transferee nor to any prior collecting bank of that transferee.