84-4-209. Encoding and retention warranties. (a) 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 depository bank encodes, that bank also makes the warranty.
(b) 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 depository bank undertakes to retain an item, that bank also makes this warranty.
(c) 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 for 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.
History: L. 1991, ch. 296, ยง 90; February 1, 1992.
KANSAS COMMENT, 1996
This section is identical to the 1995 Official Text. It is new and was made necessary by the increasing use of computerized and electronic nature of check processing. The section covers two situations, the encoding of the amount on the check by the depositary bank and transfer of the identifying information on the check into electronic form by a party that keeps the check in a truncated process. Each warrant that the encoding is accurate and complies with the agreement.
The damages provision is similar to the damages provisions of 84-3-416(b) and 84-3-417(b) regarding expenses, and under the Official Comments to those provisions the damages include interest and attorney fees.
Revisor's Note:
In 1991 former section 84-4-209 was transferred to 84-4-211 as a conforming amendment in the revision of article 3 of the code and the number reassigned to a new section.
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