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Presentment warranties - 13 Pa. Cons. Stat. § 4208

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     § 4208.  Presentment warranties.
        (a)  General rule.--If an unaccepted draft is presented to
     the drawee for payment or acceptance and the drawee pays or
     accepts the draft, the person obtaining payment or acceptance,
     at the time of presentment, and a previous transferor of the
     draft, at the time of transfer, warrant to the drawee that pays
     or accepts the draft in good faith that:
            (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 purported drawer of the draft is unauthorized.
        (b)  Measure of damages for breach of warranty.--A drawee
     making payment may recover from a 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, and if the acceptor makes payment
     with respect to the draft, the acceptor is entitled to recover
     from a warrantor for breach of warranty the amounts stated in
     this subsection.
        (c)  Defense.--If a drawee asserts a claim for breach of
     warranty under subsection (a) 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 section 3404 (relating to imposters; fictitious
     payees) or 3405 (relating to employer's responsibility for
     fraudulent indorsement by employee) or the drawer is precluded
     under section 3406 (relating to negligence contributing to
     forged signature or alteration of instrument) or 4406 (relating
     to duty of customer to discover and report unauthorized
     signature or alteration) from asserting against the drawee the
     unauthorized indorsement or alteration.
        (d)  Other warranties.--If a dishonored draft is presented
     for payment to the drawer or an indorser or any other item is
     presented for payment to a party obliged to pay the item, and
     the item is paid, the person obtaining payment and a prior
     transferor of the item warrant to the person making payment in
     good faith that the warrantor is, or was, at the time the
     warrantor transferred the item, a person entitled to enforce the
     item or authorized to obtain payment on behalf of a person
     entitled to enforce the item. 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)  Prohibition against certain disclaimers and discharge.--
     The warranties stated in subsections (a) and (d) 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.
        (f)  Cause of action.--A cause of action for breach of
     warranty under this section accrues when the claimant has reason
     to know of the breach.
     (July 9, 1992, P.L.507, No.97, eff. one year)

        1992 Amendment.  Act 97 added present section 4208 and
     renumbered former section 4208 to present section 4210.
        Cross References.  Section 4208 is referred to in sections
     4302, 4406 of this title.

Last modified: November 27, 2007