{"data":{"id":"us-ky/krs-355.4-207","jurisdiction":"us-ky","citation":"KRS 355.4-207","heading":"Transfer warranties.","body":"(1) A customer or collecting bank that transfers an item and receives a settlement or\nother consideration warrants to the transferee and to any subsequent collecting bank\nthat:\n(a) The warrantor is a person entitled to enforce the item;\n(b) All signatures on the item are authentic and authorized;\n(c) The item has not been altered;\n(d) The item is not subject to a defense or claim in recoupment (KRS 355.3 -\n305(1)) of any party that can be asserted against the warrantor;\n(e) The warrantor has no knowledge of any i nsolvency proceeding commenced\nwith respect to the maker or acceptor or, in the case of an unaccepted draft, the\ndrawer; and\n(f) With respect to any remotely created item, that person on whose account the\nitem is drawn authorized the issuance of the item i n the amount for which the\nitem is drawn.\n(2) If an item is dishonored, a customer or collecting bank transferring the item and\nreceiving settlement or other consideration is obliged to pay the amount due on the\nitem:\n(a) According to the terms of the item at the time it was transferred; or\n(b) If the transfer was of an incomplete item, according to its terms when\ncompleted as stated in KRS 355.3-115 and 355.3-407.\nThe obligation of a transferor is owed to the transferee and to any subsequent\ncollecting bank that takes the item in good faith. A transferor cannot disclaim its\nobligation under this subsection by an indorsement stating that it is made \"without\nrecourse\" or otherwise disclaiming liability.\n(3) A person to whom the warranties under subsection (1 ) of this section are made and\nwho took the item in good faith may recover from the warrantor as damages for\nbreach of warranty an amount equal to the loss suffered as a result of the breach, but\nnot more than the amount of the item plus expenses and loss of interest incurred as\na result of the breach.\n(4) The warranties stated in subsection (1) of this section cannot be disclaimed with\nrespect to checks. Unless notice of a claim for breach of warranty is given to the\nwarrantor within thirty (30) days after the claimant has reason to know of the breach\nand the identity of the warrantor, the warrantor is discharged to the extent of any\nloss caused by the delay in giving notice of the claim.\n(5) A claim for relief for breach of warranty under this section accr ues when the\nclaimant has reason to know of the breach.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33531","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:45Z","sha256":"99f9b210897b2905cb851edb943ce41eb76c6f602af02e2f3253e50c2e728f52","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.4-206","next":"us-ky/krs-355.4-208"},"notice":"GroundRules: Original legal text. Not legal advice."}