Abstract: Requires warrantors to pay expenses for failure to timely pay warranty claims under
certain circumstances.
Present law (R.S. 10:3-416(b)) provides that a holder of a warranty under present law who took the
instrument in good faith may recover from the warrantor damages for breach of warranty in an
amount equal to the loss suffered as a result of the breach not to exceed the amount of the instrument
plus expenses and loss of interest incurred.
Proposed law retains present law and requires a warrantor of a claim to pay expenses and attorney
fees if the warrantor fails to pay the claim within 30 days of receiving written notice from the person
to whom warranties are to be made. Proposed law also requires the notice be delivered via
commercial courier or by either registered or certified mail.
Present law (R.S. 10:3-417(b)) provides that a drawee making payment may recover from any
warrantor damages for breach of warranty equal to the amount paid by the drawee less the amount
the drawee received or is entitled to receive from the drawer because of the payment. Present law
also provides that a drawee is entitled to compensation for expenses and loss of interest resulting
from the breach.
Present law (R.S. 10:3-417(b)) establishes that a right for a drawee to recover damages under present
law is not affected if the drawee fails to exercise ordinary care in making payment.
Present law (R.S. 10:3-417(b)) provides that if a drawee accepts a draft that a breach of warranty is
a defense to the obligation of the acceptor. Present law also provides that an acceptor who makes
a payment with respect to the draft is entitled to recover from any warrantor for breach of warranty
the amounts provided by present law.
Proposed law retains present law and requires a warrantor of a claim to pay expenses and attorney
fees if the warrantor fails to pay the claim within 30 days of receiving written notice from the drawee
to whom warranties are to be made. Proposed law also requires the notice be delivered via
commercial courier or by either registered or certified mail.
Present law (R.S. 10:4-207(c)) provides that a holder of a warranty under present law who took the
instrument in good faith may recover from the warrantor damages for breach of warranty in an
amount equal to the loss suffered as a result of the breach not to exceed the amount of the instrument
plus expenses and loss of interest incurred.
Proposed law retains present law and requires a warrantor of a claim to pay expenses and attorney
fees if the warrantor fails to pay the claim within 30 days of receiving written notice from the person
to whom warranties are to be made. Proposed law also requires the notice be delivered via
commercial courier or by either registered or certified mail.
Present law (R.S. 10:4-208(b)) provides that a drawee making payment may recover from any
warrantor damages for breach of warranty equal to the amount paid by the drawee less the amount
the drawee received or is entitled to receive from the drawer because of the payment. Present law
also provides that a drawee is entitled to compensation for expenses and loss of interest resulting
from the breach.
Present law (R.S. 10:4-208(b)) establishes that a right for a drawee to recover damages under present
law is not affected if the drawee fails to exercise ordinary care in making payment.
Present law (R.S. 10:4-208(b)) provides that if a drawee accepts a draft that a breach of warranty
is a defense to the obligation of the acceptor. Present law also provides that an acceptor who makes
a payment with respect to the draft is entitled to recover from any warrantor for breach of warranty
the amounts provided by present law.
Proposed law retains present law and requires a warrantor of a claim to pay expenses and attorney
fees if the warrantor fails to pay the claim within 30 days of receiving written notice from the drawee
to whom warranties are to be made. Proposed law also requires the notice be delivered via
commercial courier or by either registered or certified mail.
(Amends R.S. 10:3-416(b) and (c), 3-417(b), (c), and (e), 4-207(c) and (d), and 4-208(b), (c), and
(e))
Summary of Amendments Adopted by House
The House Floor Amendments to the engrossed bill:
1. Make technical changes.