28-3-416. TRANSFER WARRANTIES. (1) A person who transfers an instrument for consideration warrants to the transferee and, if the transfer is by indorsement, to any subsequent transferee that:
(a) The warrantor is a person entitled to enforce the instrument;
(b) All signatures on the instrument are authentic and authorized;
(c) The instrument has not been altered;
(d) The instrument is not subject to a defense or claim in recoupment of any party which can be asserted against the warrantor;
(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
(f) If the instrument is a demand draft, creation of the instrument according to the terms on its face was authorized by the person identified as drawer.
(2) A person to whom the warranties under subsection (1) 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.
(3) The warranties stated in subsection (1) 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 (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 (2) of this section is discharged to the extent of any loss caused by the delay in giving notice of the claim.
(4) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.
(5) If the warranty in subsection (1)(f) of this section is not given by a transferor under applicable conflict of law rules, then the warranty is not given to that transferor when that transferor is a transferee.
History:
[28-3-416, added 1993, ch. 288, sec. 2, p. 1044; am. 2002, ch. 121, sec. 3, p. 341.]
Structure Idaho Code
Title 28 - COMMERCIAL TRANSACTIONS
Chapter 3 - UNIFORM COMMERCIAL CODE — NEGOTIABLE INSTRUMENTS
Section 28-3-402 - SIGNATURE BY REPRESENTATIVE.
Section 28-3-403 - UNAUTHORIZED SIGNATURE.
Section 28-3-404 - IMPOSTORS — FICTITIOUS PAYEES.
Section 28-3-405 - EMPLOYER’S RESPONSIBILITY FOR FRAUDULENT INDORSEMENT BY EMPLOYEE.
Section 28-3-406 - NEGLIGENCE CONTRIBUTING TO FORGED SIGNATURE OR ALTERATION OF INSTRUMENT.
Section 28-3-407 - ALTERATION.
Section 28-3-408 - DRAWEE NOT LIABLE ON UNACCEPTED DRAFT.
Section 28-3-409 - ACCEPTANCE OF DRAFT — CERTIFIED CHECK.
Section 28-3-410 - ACCEPTANCE VARYING DRAFT.
Section 28-3-411 - REFUSAL TO PAY CASHIER’S CHECKS, TELLER’S CHECKS, AND CERTIFIED CHECKS.
Section 28-3-412 - OBLIGATION OF ISSUER OF NOTE OR CASHIER’S CHECK.
Section 28-3-413 - OBLIGATION OF ACCEPTOR.
Section 28-3-414 - OBLIGATION OF DRAWER.
Section 28-3-415 - OBLIGATION OF INDORSER.
Section 28-3-416 - TRANSFER WARRANTIES.
Section 28-3-417 - PRESENTMENT WARRANTIES.
Section 28-3-418 - PAYMENT OR ACCEPTANCE BY MISTAKE.