C.R.S. Section 4-3-417
Presentment warranties


(a)

If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft, at the time of transfer, warrant to the drawee making payment or accepting 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;

(3)

The warrantor has no knowledge that the signature of the drawer of the draft is unauthorized; and

(4)

If the draft is a demand draft, creation of the demand draft according to the terms on its face was authorized by the person identified as drawer. Nothing in this section shall be construed to impair the rights of the drawer against the drawee.

(b)

A drawee making payment may recover from any 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. If the acceptor makes payment with respect to the draft, the acceptor is entitled to recover from any warrantor for breach of warranty the amounts stated in this subsection (b).

(c)

If a drawee asserts a claim for breach of warranty under subsection (a) of this section 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 4-3-404 or 4-3-405 or the drawer is precluded under section 4-3-406 or 4-4-406 from asserting against the drawee the unauthorized indorsement or alteration.

(d)

If (i) a dishonored draft is presented for payment to the drawer or an indorser or (ii) any other instrument is presented for payment to a party obliged to pay the instrument, and (iii) payment is received, the following rules apply:

(1)

The person obtaining payment and a prior transferor of the instrument warrant to the person making payment in good faith that the warrantor is, or was, at the time the warrantor transferred the instrument, a person entitled to enforce the instrument or authorized to obtain payment on behalf of a person entitled to enforce the instrument.

(2)

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)

The warranties stated in subsections (a) and (d) 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 days after the claimant has reason to know of the breach and the identity of the warrantor, the liability of the warrantor under subsection (b) or (d) of this section is discharged to the extent of any loss caused by the delay in giving notice of the claim.

(f)

A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.

(g)

A demand draft is a check, as provided in section 4-3-104 (f).

(h)

If the warranty in paragraph (4) of subsection (a) 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.

Source: Section 4-3-417 — Presentment warranties, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-04.­pdf (accessed Oct. 20, 2023).

4‑3‑101
Short title
4‑3‑102
Subject matter
4‑3‑103
Definitions
4‑3‑104
Negotiable instrument
4‑3‑105
Issue of instrument
4‑3‑106
Unconditional promise or order
4‑3‑107
Instrument payable in foreign money
4‑3‑108
Payable on demand or at definite time
4‑3‑109
Payable to bearer or to order
4‑3‑110
Identification of person to whom instrument is payable
4‑3‑111
Place of payment
4‑3‑112
Interest
4‑3‑113
Date of instrument
4‑3‑114
Contradictory terms of instrument
4‑3‑115
Incomplete instrument
4‑3‑116
Joint and several liability
4‑3‑117
Other agreements affecting instrument
4‑3‑118
Statute of limitations
4‑3‑119
Notice of right to defend action
4‑3‑201
Negotiation
4‑3‑202
Negotiation subject to rescission
4‑3‑203
Transfer of instrument
4‑3‑204
Indorsement
4‑3‑205
Special indorsement
4‑3‑206
Restrictive indorsement
4‑3‑207
Reacquisition
4‑3‑301
Person entitled to enforce instrument
4‑3‑302
Holder in due course
4‑3‑303
Value and consideration
4‑3‑304
Overdue instrument
4‑3‑305
Defenses and claims in recoupment
4‑3‑306
Claims to an instrument
4‑3‑307
Notice of breach of fiduciary duty
4‑3‑308
Proof of signatures and status as holder in due course
4‑3‑309
Enforcement of lost, destroyed, or stolen instrument
4‑3‑310
Effect of instrument on obligation for which taken
4‑3‑311
Accord and satisfaction by use of instrument
4‑3‑312
Lost, destroyed, or stolen cashier’s check, teller’s check, or certified check
4‑3‑401
Signature necessary for liability on instrument
4‑3‑402
Signature by representative
4‑3‑403
Unauthorized signature
4‑3‑404
Impostors
4‑3‑405
Employer’s responsibility for fraudulent indorsement by employee
4‑3‑406
Negligence contributing to forged signature or alteration of instrument
4‑3‑407
Alteration
4‑3‑408
Drawee not liable on unaccepted draft
4‑3‑409
Acceptance of draft
4‑3‑410
Acceptance of varying draft
4‑3‑411
Refusal to pay cashier’s checks, teller’s checks, and certified checks
4‑3‑412
Obligation of issuer of note or cashier’s check
4‑3‑413
Obligation of acceptor
4‑3‑414
Obligation of drawer
4‑3‑415
Obligation of indorser
4‑3‑416
Transfer warranties
4‑3‑417
Presentment warranties
4‑3‑418
Payment or acceptance by mistake
4‑3‑419
Instruments signed for accommodation
4‑3‑420
Conversion of instrument
4‑3‑501
Presentment
4‑3‑502
Dishonor
4‑3‑503
Notice of dishonor
4‑3‑504
Excused presentment and notice of dishonor
4‑3‑505
Evidence of dishonor
4‑3‑506
Recording credit card or social security numbers prohibited
4‑3‑601
Discharge and effect of discharge
4‑3‑602
Payment
4‑3‑603
Tender of payment
4‑3‑604
Discharge by cancellation or renunciation
4‑3‑605
Discharge of indorsers and accommodation parties
Green check means up to date. Up to date

Current through Fall 2024

§ 4-3-417’s source at colorado​.gov