C.R.S. Section 4-4-208
Presentment warranties


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 that pays or accepts the draft in good faith that:


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;


The draft has not been altered;


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


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.


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 (b) is not affected by any failure of the drawee to exercise ordinary care in making payment. If the drawee accepts the draft (i) breach of warranty is a defense to the obligation of the acceptor, and (ii) 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 (b).


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 reproving 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.


If (i) a dishonored draft is presented for payment to the drawer or an indorser or (ii) 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.


The warranties stated in subsections (a) and (b) 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 warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim.


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


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


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 4-4-208 — Presentment warranties, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-04.­pdf (accessed Oct. 20, 2023).

Short title
Variation by agreement - measure of damages - action constituting ordinary care
Definitions and index of definitions
“Bank” - “depositary bank” - “intermediary bank” - “collecting bank” - “payor bank” - “presenting bank”
Payable through or payable at bank - collecting bank
Separate office of bank
Time of receipt of items
Electronic presentment
Statute of limitations
Status of collecting banks as agent and provisional status of credits - applicability of article - item indorsed “pay any bank”
Responsibility for collection or return - when action timely
Effect of instructions
Methods of sending and presenting - sending directly to payor bank
Depositary bank holder of unindorsed item
Transfer between banks
Transfer warranties
Presentment warranties
Encoding and retention warranties
Security interest of collecting bank in items, accompanying documents, and proceeds
When bank gives value for purposes of holder in due course
Presentment by notice of item not payable by, through, or at a bank - liability of drawer or indorser
Medium and time of settlement by bank
Right of charge-back or refund - liability of collecting bank - return of item
Final payment of item by payor bank - when provisional debits and credits become final - when certain credits become available for withdrawal
Insolvency and preference
Deferred posting - recovery of payment by return of items - time of dishonor - return of items by payor bank
Payor bank’s responsibility for late return of item
When items subject to notice, stop-payment order, legal process, or setoff - order in which items may be charged or certified
When bank may charge customer’s account
Bank’s liability to customer for wrongful dishonor - time of determining insufficiency of account
Customer’s right to stop payment - burden of proof of loss
Bank not obligated to pay check more than six months old
Death or incompetence of customer
Customer’s duty to discover and report unauthorized signature or alteration
Payor bank’s right to subrogation on improper payment
Handling of documentary drafts - duty to send for presentment and to notify customer of dishonor
Presentment of “on arrival” drafts
Responsibility of presenting bank for documents and goods - report of reason for dishonor - referee in case of need
Privilege of presenting bank to deal with goods - security interest for expenses
Green check means up to date. Up to date

Current through Fall 2024

§ 4-4-208’s source at colorado​.gov