2010 Pennsylvania Code
Title 13 - COMMERCIAL CODE
Chapter 34 - Liability of Parties
3416 - Transfer warranties.

     § 3416.  Transfer warranties.
        (a)  Warranties to transferees.--A person who transfers an
     instrument for consideration warrants to the transferee and, if
     the transfer is by indorsement, to any subsequent transferee
     that:
            (1)  the warrantor is a person entitled to enforce the
        instrument;
            (2)  all signatures on the instrument are authentic and
        authorized;
            (3)  the instrument has not been altered;
            (4)  the instrument is not subject to a defense or claim
        in recoupment of any party which can be asserted against the
        warrantor; and
            (5)  the warrantor has no knowledge of any insolvency
        proceeding commenced with respect to the maker or acceptor
        or, in the case of an unaccepted draft, the drawer.
        (b)  Damages for breach of warranty.--A person to whom the
     warranties under subsection (a) are made and who took the
     instrument in good faith may recover from the warrantor as
     damages for breach of warranty an amount equal to the loss
     suffered as a result of the breach, but not more than the amount
     of the instrument plus expenses and loss of interest incurred as
     a result of the breach.
        (c)  Prohibition against disclaimer of warranties regarding
     checks.--The warranties stated in subsection (a) cannot be
     disclaimed with respect to checks. Unless notice of a claim for
     breach of warranty is given to the warrantor within 30 days
     after the claimant has reason to know of the breach and the
     identity of the warrantor, the liability of the warrantor under
     subsection (b) is discharged to the extent of any loss caused by
     the delay in giving notice of the claim.
        (d)  Action for breach of warranty.--A cause of action for
     breach of warranty under this section accrues when the claimant
     has reason to know of the breach.