KRS 355.4-209: Encoding and retention warranties.

(1) A person who encodes information on or with respect to an item after issue warrants

to any subsequent collecting bank and to the payor bank or other payor that the

information is correctly encoded. If the customer of a depositary bank encodes, that

bank also makes the warranty.

(2) A person who undertakes to retain an item pursuant to an agreement for electronic

presentment warrants to any subsequent collecting bank and to the payor bank or

other payor that retention and presentment of the item comply with the agreement.

If a customer of a depositary bank undertakes to retain an item, that bank also

makes this warranty.

(3) A person to whom warranties are made under this section and who took the item in

good faith may recover from the warrantor as damages f or breach of warranty an

amount equal to the loss suffered as a result of the breach, plus expenses and loss of

interest incurred as a result of the breach.