A person who transfers an instrument for consideration makes transfer warranties to all subsequent transferees and holders who take the instrument in good faith.

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Transfer warranties are promises made by a transferor that the instrument being transferred is genuine, that the transferor has good title to it, and that there are no undisclosed claims or defenses that might affect the validity of the instrument. These warranties are passed on to subsequent transferees and holders who take the instrument in good faith.

A Person Who Transfers an Instrument for Consideration Makes Transfer