Michigan Laws 440.4209 – Electronic presentment; encoding of information and retaining items; warranties; recovery of damages, expenses, and loss of interest
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(1) A person who 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 who undertakes to retain an item pursuant to an agreement for electronic presentment 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.
Terms Used In Michigan Laws 440.4209
- Bank: means a person engaged in the business of banking, including a saving bank, saving and loan association, credit union, or trust company. See Michigan Laws 440.4105
- Collecting bank: means a bank handling the item for collection except the payor bank. See Michigan Laws 440.4105
- Customer: means any 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 Michigan Laws 440.4104
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Depositary bank: means the first bank to take an item even though it is also the payor bank, unless the item is presented for immediate payment over the counter. See Michigan Laws 440.4105
- Good faith: except as otherwise provided in article 5, means honesty in fact and the observance of reasonable commercial standards of fair dealing. See Michigan Laws 440.1201
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or pay. See Michigan Laws 440.4104
- Payor bank: means a bank that is the drawee of a draft. See Michigan Laws 440.4105
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity. See Michigan Laws 440.1201
(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.