National Check Professional (NCP) Certification Practice Test

Disable ads (and more) with a membership for a one time $4.99 payment

Prepare for the National Check Professional (NCP) Certification Test with our targeted quizzes. Enhance your knowledge using multiple-choice questions, hints, and explanations. Start your journey toward certification success today!

Practice this question and more.


What type of warranty is provided under UCC concerning the authenticity of signatures?

  1. Presentment warranty

  2. Transfer warranty

  3. Electronic warranty

  4. Registration warranty

The correct answer is: Transfer warranty

The warranty provided under the Uniform Commercial Code (UCC) concerning the authenticity of signatures is known as the transfer warranty. When a negotiable instrument is transferred, the transferor guarantees to the transferee (and any subsequent holders) that the signatures on the instrument are authentic. This means that the transferor assures the recipient that they are not forging signatures and that the document is valid as presented. A transfer warranty also covers other aspects such as the right to enforce the instrument and the fact that the instrument has not been altered, ensuring that the transferee can rely on the integrity of the transaction. This type of warranty is critical in maintaining trust in the negotiability of instruments in commerce, forming a foundational principle in the transfer and negotiation processes under the UCC. The other options do not relate specifically to the authenticity of signatures. Presentment warranty pertains to the rights and obligations that arise when an instrument is presented for payment, while electronic warranty applies to electronic payment systems. Registration warranty is not a standard term recognized within the UCC, making transfer warranty the correct and relevant choice regarding the authenticity of signatures.