Which warranties does a collecting bank give?

Question

Quizplus · Accepted Answer

According to the Uniform Commercial Code (UCC), a collecting bank gives five warranties when presenting a negotiable instrument for payment:

1. Good title: The collecting bank warrants that it has a good title to the instrument or is authorized to obtain payment or acceptance on behalf of a person who has a good title.

2. Genuine signatures: The collecting bank warrants that all signatures on the instrument are genuine or authorized.

3. No alteration: The collecting bank warrants that the instrument has not been materially altered.

4. No defense good against it: The collecting bank warrants that the instrument is enforceable according to its terms, and there are no defenses that can be used against it.

5. No knowledge of insolvency: The collecting bank warrants that it has no knowledge that the drawer or any other party to the instrument is insolvent.

Therefore, the correct answer is B - Good title, authentic signatures, no alteration, no defense good against it, and no knowledge of insolvency.

Which Warranties Does a Collecting Bank Give