{"data":{"id":"us-ky/krs-355.3-417","jurisdiction":"us-ky","citation":"KRS 355.3-417","heading":"Presentment warranties.","body":"(1) (a) If an unaccepted draft is presented to the drawee for payment or acceptance\nand the drawee pays or accepts the draft,\n1. The person obtaining payment or acceptance, at the time of presentment;\nand\n2. A previous transferor of the draft, at the time of transfer,\nwarrant to the drawee making payment or accepting the draft in good faith the\nconditions set out in paragraph (b) of this subsection.\n(b) 1. The warrantor is, or was, at the time the warrantor transferred the draft,\na person entitled to enforce the d raft or authorized to obtain payment or\nacceptance of the draft on behalf of a person entitled to enforce the\ndraft;\n2. The draft has not been altered;\n3. The warrantor has no knowledge that the signature of the drawer of the\ndraft is unauthorized; and\n4. With respect to any remotely created item, that the person on whose\naccount the item is drawn authorized the issuance of the item in the\namount for which the item is drawn.\n(2) (a) A drawee making payment may recover from any warrantor damages for\nbreach of warranty equal to the amount paid by the drawee less the amount\nthe drawee received or is entitled to receive from the drawer because of the\npayment. In addition, the drawee is entitled to compensation for expenses,\nincluding reasonable attorney's fee s, and loss of interest resulting from the\nbreach.\n(b) The right of the drawee to recover damages under this subsection is not\naffected by any failure of the drawee to exercise ordinary care in making\npayment.\n(c) If the drawee accepts the draft, breach of  warranty is a defense to the\nobligation of the acceptor.\n(d) If the acceptor makes payment with respect to the draft, the acceptor is\nentitled to recover from any warrantor for breach of warranty the amounts\nstated in this subsection.\n(3) If a drawee asse rts a claim for breach of warranty under subsection (1) of this\nsection based on an unauthorized indorsement of the draft or an alteration of the\ndraft, the warrantor may defend by proving that the indorsement is effective under\nKRS 355.3-404 or 355.3 -405 or the drawer is precluded under KRS 355.3 -406 or\n355.4-406 from asserting against the drawee the unauthorized indorsement or\nalteration.\n(4) (a) If:\n1. a. A dishonored draft is presented for payment to the drawer or an\nindorser; or\nb. Any other instrument  is presented for payment to a party obliged\nto pay the instrument; and\n2. Payment is received,\nthe rules set out in paragraph (b) of this subsection apply.\n(b) 1. The person obtaining payment and a prior transferor of the instrument\nwarrant to the person  making payment in good faith that the warrantor\nis, or was, at the time the warrantor transferred the instrument, a person\nentitled to enforce the instrument or authorized to obtain payment on\nbehalf of a person entitled to enforce the instrument.\n2. The person making payment may recover from any warrantor for breach\nof warranty an amount equal to the amount paid plus expenses,\nincluding reasonable attorney's fees, and loss of interest resulting from\nthe breach.\n(5) (a) The warranties stated in subsections  (1) and (4) of this section cannot be\ndisclaimed with respect to checks.\n(b) Unless notice of a claim for breach of warranty is given to the warrantor\nwithin thirty (30) days after the claimant has reason to know of the breach and\nthe identity of the warrantor, the liability of the warrantor under subsection (2)\nor (4) of this section is discharged to the extent of any loss caused by the\ndelay in giving notice of the claim.\n(6) A claim for relief for breach of warranty under this section accrues when the\nclaimant has reason to know of the breach.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55647","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:44Z","sha256":"a6397cb3c54d71417ac94f9f26e0addb60ee462f299cfc27cc683d44cae82095","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.3-416","next":"us-ky/krs-355.3-418"},"notice":"GroundRules: Original legal text. Not legal advice."}