N.Y. GOB. LAW § 11-104 : NY Code - Section 11-104: Additional liability of drawer

Search N.Y. GOB. LAW § 11-104 : NY Code - Section 11-104: Additional liability of drawer

1.  Notwithstanding  any
  contrary provision of law, a drawer negotiating a  check  who  knows  or
  should  know  that  payment  of such check will be refused by the drawee
  bank either because the drawer has no account with such bank or  because
  the  drawer  has  insufficient  funds on deposit with such bank shall be
  liable, except as provided in subdivision four of this section,  to  the
  payee  who  has  presented such check for payment, not only for the face
  amount of the check but also for additional, liquidated  damages,  where
  the  check  is dishonored and the drawer fails to pay the face amount of
  such check within thirty days following the date of mailing by the payee
  of the second written demand for payment as provided in this section.
    2. In the case of a drawer negotiating a check  who  knows  or  should
  know  that  payment  of  such  check  will be refused by the drawee bank
  because the drawer has no  account  with  such  bank,  such  additional,
  liquidated  damages  shall be in an amount to be determined by the court
  in light of the circumstances, but in no  event  shall  such  amount  be
  greater  than  twice the face amount of the check or seven hundred fifty
  dollars, whichever is less.
    3. In the case of a drawer negotiating a check  who  knows  or  should
  know  that  payment  of  such  check  will be refused by the drawee bank
  because the drawer has insufficient funds on  deposit  with  such  bank,
  such  additional,  liquidated  damages  shall  be  in  an  amount  to be
  determined by the court in light of the circumstances, but in  no  event
  shall  such amount be greater than twice the face amount of the check or
  four hundred dollars, whichever is less.
    4. The drawer shall not be liable to the  payee  for  the  additional,
  liquidated damages provided for by this section if:
    (a)  The  drawer  gave  such  check  as  payment  for  the  rental  of
  residential premises; or
    (b) The drawer gave such check  as  payment  for  residential  service
  supplied by a gas, electric, steam, telephone or water corporation; or
    (c) The drawer gave such check as repayment of all, or a portion of, a
  debt secured by collateral which the payee has repossessed.
    5.  Defenses  which  may be asserted against any person not having the
  rights of a holder in due course, as specified  in  sections  3-306  and
  3-408  of the uniform commercial code, shall be available to a defendant
  in any action or proceeding in which  additional  liability  is  claimed
  under this section.
    6.  The  additional  liquidated  damages  provided for in this section
  shall be available only to those  persons  or  entities  which  post  or
  otherwise  give  conspicuous  notice  to  the  public of the additional,
  liquidated damages which may be imposed pursuant to this  section.  Such
  notice  shall  set  forth  the additional liquidated damages that may be
  imposed if a check is dishonored and  the  section  of  law  authorizing
  imposition  of  such damages, and provide notice that criminal penalties
  also may apply.
    7. The first written demand for payment on the dishonored check  shall
  be in the form prescribed by subdivision eight of this section and shall
  be sent to the drawer's last known residence address or last known place
  of  business  by  first  class mail and by certified mail return receipt
  requested with delivery restricted to the drawer, on or after  the  date
  the  payee  received  notice  that  such  check had been dishonored. The
  second written demand for payment on the dishonored check  shall  be  in
  the form provided in subdivision eight of this section and shall be sent
  to the drawer at the drawer's last known residence address or last known
  place  of  business  by  first  class mail on or after the fifteenth day
  following the date of receipt of the first written demand for payment.

    8. The written demands for payment required by  subdivision  seven  of
  this  section, shall be in the following form and shall be printed in at
  least ten point type in both the English and Spanish languages:
                    DEMAND FOR PAYMENT OF DISHONORED CHECK
 
  DATE:                                1ST NOTICE
                                       2ND AND FINAL NOTICE
  TO: _____________________            WARNING: YOU MAY BE
      NAME OF DRAWER                   SUED 30 DAYS AFTER
      _____________________            THE DATE OF THIS
      _____________________            NOTICE IF YOU DO
      _____________________            NOT MAKE PAYMENT
 
  LAST KNOWN RESIDENCE ADDRESS
        OR PLACE OF BUSINESS
 
  YOUR CHECK IN THE AMOUNT OF $___________ DATED____________________
    PAYABLE TO THE ORDER OF__________________ HAS BEEN DISHONORED BY
  THE BANK UPON WHICH IT WAS DRAWN, BECAUSE:
  ________YOU HAD NO ACCOUNT WITH THAT BANK.
  ________YOU HAD INSUFFICIENT FUNDS ON DEPOSIT WITH THAT BANK.
  IF  YOU DO NOT MAKE PAYMENT, YOU MAY BE SUED UNDER SECTION 11-104 OF THE
  GENERAL OBLIGATIONS LAW TO RECOVER PAYMENT. IF A  JUDGMENT  IS  RENDERED
  AGAINST  YOU  IN COURT, IT MAY INCLUDE NOT ONLY THE ORIGINAL FACE AMOUNT
  OF THE CHECK, BUT ALSO ADDITIONAL LIQUIDATED DAMAGES, AS FOLLOWS:
    --IF YOU HAD NO ACCOUNT WITH THE BANK UPON WHICH THE CHECK WAS  DRAWN,
  AN  ADDITIONAL  SUM  WHICH MAY BE EQUIVALENT TO TWICE THE FACE AMOUNT OF
  THE CHECK OR SEVEN HUNDRED FIFTY DOLLARS, WHICHEVER IS LESS; OR
    --IF YOU HAD INSUFFICIENT FUNDS ON DEPOSIT WITH THE  BANK  UPON  WHICH
  THE  CHECK WAS DRAWN, AN ADDITIONAL SUM WHICH MAY BE EQUIVALENT TO TWICE
  THE FACE AMOUNT OF THE CHECK OR FOUR HUNDRED DOLLARS, WHICHEVER IS LESS.
 
  PLEASE MAKE PAYMENT IN THE AMOUNT OF_______ TO:
 
      ____________________________________________________________________
      NAME OF PAYEE
      ____________________________________________________________________
      ____________________________________________________________________
      ____________________________________________________________________
 
                  ADDRESS TO WHICH PAYMENT SHOULD BE DELIVERED
 
      IF YOU DISPUTE ANY OF THE FACTS  LISTED  ABOVE,  CONTACT  THE  PAYEE
    IMMEDIATELY.
 
      9.  The  public  service  commission shall study the extent to which
    checks given in payment for residential service  supplied  by  a  gas,
    electric,  steam, telephone or water corporation are dishonored either
    because the drawer had no account with the bank on which the check was
    written or because the drawer had insufficient funds on  deposit  with
    such  bank,  including  the extent of chronic payment with checks that
    are dishonored and  the  impact  of  such  dishonored  checks  on  the
    operating  costs  of  these  corporations  and their requests for rate
    increases, and whether any penalty for dishonored checks, in  addition
    to  recovery of the utilities' administrative costs, is necessary. The
    commission shall report to the governor and the legislature  no  later
    than one year after the effective date of this section.