§ 28:7-508. Warranties of collecting bank as to documents.

Current through October 23, 2012

A collecting bank or other intermediary known to be entrusted with documents on behalf of another or with collection of a draft or other claim against delivery of documents warrants by such delivery of the documents only its own good faith and authority. This rule applies even though the intermediary has purchased or made advances against the claim or draft to be collected.

                
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(Dec. 30, 1963, 77 Stat. 730, Pub. L. 88-243, § 1.)

HISTORICAL AND STATUTORY NOTES

UNIFORM COMMERCIAL CODE COMMENT

Prior Uniform Statutory Provision

None.

Purposes

1. To state the limited warranties given with respect to the documents accompanying a documentary draft.

2. In warranting its authority a bank only warrants its authority from its transferor. See Section 4-203. It does not warrant the genuineness or effectiveness of the document. Compare Section 7-507.

3. Other duties and rights of banks handling documentary drafts for collection are stated in Article 4, Part 5.

Cross References

Sections 4-203 and 7-507, 4-501 through 4-504.

Definitional Cross References

"Collecting bank". Section 4-105.

"Delivery". Section 1-201.

"Document". Section 7-102.

"Draft". Section 5-103.

"Good faith". Section 1-201.

Prior Codifications

1981 Ed., § 28:7-508.

1973 Ed., § 28:7-508.