KRS 355.3-414: Obligation of drawer.

(1) This section does not apply to cashier's checks or other drafts drawn on the drawer.

(2) If an unaccepted draft is dishonored, the drawer is obliged to pay the draft:

(a) According to its terms at the time it was issued or, if not issued, at the time it

first came into possession of a holder; or

(b) If the drawer signed an incomplete instrument, according to its terms when

completed, to the extent stated in KRS 355.3-115 and 355.3-407.

The obligation is owed to a person entitled to enforce the draft or to an indorser who

paid the draft under KRS 355.3-415.

(3) If a draft is accepted by a bank, the drawer is discharged, regardless of when or by

whom acceptance was obtained.

(4) If a draft is accepted and the acceptor is not a bank, the obligation of the draw er to

pay the draft if the draft is dishonored by the acceptor is the same as the obligation

of an indorser under KRS 355.3-415(1) and (3).

(5) If a draft states that it is drawn "without recourse" or otherwise disclaims liability of

the drawer to pay the draft, the drawer is not liable under subsection (2) of this

section to pay the draft if the draft is not a check. A disclaimer of the liability stated

in subsection (2) of this section is not effective if the draft is a check.

(6) If:

(a) A check is not p resented for payment or given to a depositary bank for

collection within thirty (30) days after its date;

(b) The drawee suspends payments after expiration of the thirty (30) day period

without paying the check; and

(c) Because of the suspension of payment s, the drawer is deprived of funds

maintained with the drawee to cover payment of the check,

the drawer to the extent deprived of funds may discharge its obligation to pay the

check by assigning to the person entitled to enforce the check the rights of th e

drawer against the drawee with respect to the funds.