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Can you summarize KYRS 355.3-415?
Negotiable Instruments > Obligation of indorser.
Short Summary
This section of the Kentucky Revised Statutes governs the obligation of indorsers of dishonored instruments. It states that if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument according to the terms of the instrument at the time it was indorsed. If the indorser indorsed an incomplete instrument, they are obliged to pay according to its terms when completed, to the extent stated in the relevant sections. The obligation of the indorser is owed to a person entitled to enforce the instrument or to a subsequent indorser who paid the instrument under this section. However, there are exemptions to this obligation. Indorsers who have made an indorsement stating that it is made ‘without recourse’ or otherwise disclaiming liability are not liable to pay the instrument. Additionally, if notice of dishonor complying with the required section is not given to an indorser, their liability is discharged. Furthermore, if a draft is accepted by a bank after an indorsement is made, the liability of the indorser is discharged. Lastly, if an indorser of a check is liable under this section and the check is not presented for payment or given to a depositary bank for collection within thirty (30) days after the indorsement was made, the liability of the indorser is discharged.
Whom does it apply to?
Indorsers of dishonored instruments
What does it govern?
Obligation of indorser
What are exemptions?
Indorsers who have made an indorsement stating that it is made 'without recourse' or otherwise disclaiming liability are not liable to pay the instrument. Additionally, if notice of dishonor complying with the required section is not given to an indorser, their liability is discharged. Furthermore, if a draft is accepted by a bank after an indorsement is made, the liability of the indorser is discharged. Lastly, if an indorser of a check is liable under this section and the check is not presented for payment or given to a depositary bank for collection within thirty (30) days after the indorsement was made, the liability of the indorser is discharged.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Kentucky