In order to ensure the negotiability of commercial paper, the UCC assumes as one of the warranties in every endorsement that all prior parties were qualified to enter into a legally binding contract.

Question

Quizplus · Accepted Answer

The statement is true. One of the implied warranties in every endorsement of commercial paper is that all prior parties were authorized to enter into a legally binding contract. This is necessary to ensure the negotiability of the paper and protect the interests of subsequent purchasers.

In Order to Ensure the Negotiability of Commercial Paper, the UCC