If a transfer is through endorsement, transfer warranties apply to any future holders; however, if the transfer does not occur through endorsement, the warranties apply only to the transferee.

Question

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In the context of negotiable instruments, when a transfer is made by endorsement, the transfer warranties extend to all future holders. However, if the transfer is made without endorsement, the warranties are only extended to the immediate transferee, not to subsequent holders. This distinction is important in determining who can be held liable under the warranties.

If a Transfer Is Through Endorsement, Transfer Warranties Apply to Any