§ 3415 Indorser Payment Obligation

Key Takeaways

•If you sign the back of a check or paper promising money and it bounces, you might have to pay that money.
•If you write 'without recourse' when you sign, you don’t have to pay if the check bounces.
•If the person who got the check doesn’t tell you it bounced in time, you don’t have to pay.
•If a bank accepts the check after you sign it, you don’t have to pay if it bounces later.

Example

You sign the back of your friend’s check to help them cash it, but the check bounces because there’s no money in their account.

Since you signed the check, you might have to pay the money. But if you wrote 'without recourse' when you signed, you’re off the hook.

(a) Subject to subdivisions (b), (c), and (d) and to subdivision (d) of Section 3419, if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument (1) according to the terms of the instrument at the time it was indorsed, or (2) if the indorser indorsed an incomplete instrument, according to its terms when completed, to the extent stated in Sections 3115 and 3407. 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. (b) If an indorsement states that it is made “without recourse” or otherwise disclaims liability of the indorser, the indorser is not liable under subdivision (a) to pay the instrument. (c) If notice of dishonor of an instrument is required by Section 3503 and notice of dishonor complying with that section is not given to an indorser, the liability of the indorser under subdivision (a) is discharged. (d) If a draft is accepted by a bank after an indorsement is made, the liability of the indorser under subdivision (a) is discharged. (e) If an indorser of a check is liable under subdivision (a) and the check is not presented for payment, or given to a depositary bank for collection, within 30 days after the day the indorsement was made, the liability of the indorser under subdivision (a) is discharged. (Repealed and added by Stats. 1992, Ch. 914, Sec. 6. Effective January 1, 1993.)

Key Takeaways

•If you sign the back of a check or paper promising money and it bounces, you might have to pay that money.
•If you write 'without recourse' when you sign, you don’t have to pay if the check bounces.
•If the person who got the check doesn’t tell you it bounced in time, you don’t have to pay.
•If a bank accepts the check after you sign it, you don’t have to pay if it bounces later.

Example

You sign the back of your friend’s check to help them cash it, but the check bounces because there’s no money in their account.

Since you signed the check, you might have to pay the money. But if you wrote 'without recourse' when you signed, you’re off the hook.

Key Takeaways

Example

Key Terms

References

§ 3415 Indorser Payment Obligation

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References