Ohio Code § 1304.18

§ 1304.18.

(A) If an unaccepted draft is presented to the drawee for payment or acceptance and the

drawee pays or accepts the draft, the person obtaining payment or acceptance, at the

time of presentment, and a previous transferor of the draft, at the time of transfer,

warrant all of the following to the drawee that pays or accepts the draft in good

faith: (1) The warrantor is, or was, at the time the warrantor transferred the draft, a person

entitled to enforce the draft or authorized to obtain payment or acceptance of the

draft on behalf of a person entitled to enforce the draft. (2) The draft has not been altered. (3) The warrantor has no knowledge that the signature of the purported drawer of the

draft is unauthorized. (4) With respect to a remotely created consumer item, the person on whose account the

item is drawn authorized the issuance of the item in the amount for which the item

is drawn. (B) A drawee making payment may recover from a 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.  In addition, the drawee is entitled to compensation for expenses and loss of interest

resulting from the breach.  The right of the drawee to recover damages under this division is not affected by

any failure of the drawee to exercise ordinary care in making payment.  If the drawee accepts the draft, breach of warranty is a defense to the obligation

of the acceptor, and, if the acceptor makes payment with respect to the draft, the

acceptor is entitled to recover from a warrantor for breach of warranty the amounts

stated in this division. (C) If a drawee asserts a claim for breach of warranty under division (A) of this section

based on an unauthorized indorsement of the draft or an alteration of the draft, the

warrantor may defend by proving that the indorsement is effective under section 1303.44 or 1303.47 of the Revised Code or the drawer is precluded under section 1303.49 or 1304.35 of the Revised Code from asserting against the drawee the unauthorized indorsement or alteration. (D) If a dishonored draft is presented for payment to the drawer or an indorser or any

other item is presented for payment to a party obliged to pay the item and if the

item is paid, the person obtaining payment and a prior transferor of the item warrant

to the person making payment in good faith that the warrantor is, or was, at the time

the warrantor transferred the item, a person entitled to enforce the item or authorized

to obtain payment on behalf of a person entitled to enforce the item.  The person making payment may recover from any warrantor for breach of warranty

an amount equal to the amount paid plus expenses and loss of interest resulting from

the breach. (E) The warranties stated in divisions (A) and (D) of this section cannot be disclaimed

with respect to checks.  Unless notice of a claim for breach of warranty is given to the warrantor within

thirty days after the claimant has reason to know of the breach and the identity of

the warrantor, the warrantor is discharged to the extent of any loss caused by the

delay in giving notice of the claim. (F) A cause of action for breach of warranty under this section accrues when the claimant

has reason to know of the breach.