If a holder presents a note for payment to the maker, which one of the following warranties is given?
A)All indorsements are genuine.
B)All signatures are genuine.
C)The holder has no knowledge that any indorsements are forged.
D)The holder is entitled to enforce the note or is authorized to obtain payment on behalf of the person entitled to enforce the note.
E)All of the above.

Question

Quizplus · Accepted Answer

When a holder presents a note for payment to the maker, the holder gives the warranty that they are entitled to enforce the note or authorized to obtain payment on behalf of the person entitled to enforce the note. This warranty is known as the warranty of entitlement under the Uniform Commercial Code (UCC), Section 3-417. The other choices are not applicable in this situation, as they relate to warranties given by endorsers or prior holders of a negotiable instrument.

If a Holder Presents a Note for Payment to the Maker