§ 6A-8-306 - Effect of guaranteeing signature, indorsement, or instruction.
SECTION 6A-8-306
§ 6A-8-306 Effect of guaranteeingsignature, indorsement, or instruction. – (a) A person who guarantees a signature of an indorser of a securitycertificate warrants that at the time of signing:
(1) the signature was genuine;
(2) the signer was an appropriate person to indorse, or ifthe signature is by an agent, the agent had actual authority to act on behalfof the appropriate person; and
(3) the signer had legal capacity to sign.
(b) A person who guarantees a signature of the originator ofan instruction warrants that at the time of signing:
(1) the signature was genuine;
(2) the signer was an appropriate person to originate theinstruction, or if the signature is by an agent, the agent had actual authorityto act on behalf of the appropriate person, if the person specified in theinstruction as the registered owner was, in fact, the registered owner, as towhich fact the signature guarantor does not make a warranty; and
(3) the signer had legal capacity to sign.
(c) A person who specially guarantees the signature of anoriginator of an instruction makes the warranties of a signature guarantorunder subsection (b) and also warrants that at the time the instruction ispresented to the issuer:
(1) the person specified in the instruction as the registeredowner of the uncertificated security will be the registered owner; and
(2) the transfer of the uncertificated security requested inthe instruction will be registered by the issuer free from all liens, securityinterests, restrictions, and claims other than those specified in theinstruction.
(d) A guarantor under subsections (a) and (b) or a specialguarantor under subsection (c) does not otherwise warrant the rightfulness ofthe transfer.
(e) A person who guarantees an indorsement of a securitycertificate makes the warranties of a signature guarantor under subsection (a)and also warrants the rightfulness of the transfer in all respects.
(f) A person who guarantees an instruction requesting thetransfer of an uncertificated security makes the warranties of a specialsignature guarantor under subsection (c) and also warrants the rightfulness ofthe transfer in all respects.
(g) An issuer may not require a special guaranty ofsignature, a guaranty of indorsement, or a guaranty of instruction as acondition to registration of transfer.
(h) The warranties under this section are made to a persontaking or dealing with the security in reliance on the guaranty, and theguarantor is liable to the person for loss resulting from their breach. Anindorser or originator of an instruction whose signature, indorsement, orinstruction has been guaranteed is liable to a guarantor for any loss sufferedby the guarantor as a result of breach of the warranties of the guarantor.