New Jersey Statutes 12A:4-207. Transfer warranties
Terms Used In New Jersey Statutes 12A:4-207
- Bank: means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union, or trust company. See New Jersey Statutes 12A:4-105
- Collecting bank: means a bank handling an item for collection except the payor bank. See New Jersey Statutes 12A:4-105
- 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 New Jersey Statutes 12A: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 12A:3-104 or an item, other than an instrument, that is an order. See New Jersey Statutes 12A:4-104
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See New Jersey Statutes 12A: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: 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
- 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) the warrantor is a person entitled to enforce the item;
(2) all signatures on the item are authentic and authorized;
(3) the item has not been altered;
(4) the item is not subject to a defense or claim in recoupment under subsection a. of 12A:3-305 of any party that can be asserted against the warrantor; and
(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.
b. 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 12A:3-115 and 12A: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.
c. A person to whom the warranties under subsection (a) 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.
d. The warranties stated in subsection 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 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.
e. 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.2.