Warranty Liability
Learn about the various types of warranty liability incurred by parties to negotiable instruments.
Transcript
In other lessons, we discussed the liability that one incurs by virtue of becoming a party to a negotiable instrument. Now, we’ll discuss another way a party may incur liability on a negotiable instrument: the breach of an implied warranty.
I. Article 3 Warranties
A negotiable instrument goes through three periods in its life: issuance, transfer, and presentment. Under Article 3, upon transfer or presentment, the instrument’s transferor or presenter makes certain implied warranties to the...