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Can you summarize IACO 554.3416?
UNIFORM COMMERCIAL CODE > Transfer warranties.
Short Summary
This legal document, part of the Iowa Code’s Uniform Commercial Code, governs transfer warranties for instruments. It states that a person who transfers an instrument for consideration warrants to the transferee and subsequent transferees that they are entitled to enforce the instrument, all signatures on the instrument are authentic and authorized, the instrument has not been altered, and the instrument is not subject to any defense or claim in recoupment. The warrantor also warrants that they have no knowledge of any insolvency proceeding commenced with respect to the maker or acceptor, and if the instrument is a demand draft, its creation was authorized by the identified drawer. A person who took the instrument in good faith and to whom these warranties are made can recover damages for breach of warranty. However, the warranties cannot be disclaimed with respect to checks. Notice of a claim for breach of warranty must be given to the warrantor within sixty days after the claimant has reason to know of the breach and the identity of the warrantor. The cause of action for breach of warranty accrues when the claimant has reason to know of the breach. If a warranty under subsection 1, paragraph ‘f’, is not given by a transferor under applicable conflict of laws rules, the warranty is not given to that transferor when that transferor is a transferee.
Whom does it apply to?
Persons who transfer an instrument for consideration and subsequent transferees
What does it govern?
Transfer warranties
What are exemptions?
The warranties stated in subsection 1 cannot be disclaimed with respect to checks.
What are the Penalties?
No specific penalties mentioned.
Jurisdiction
Iowa