Asked by Kerolos Joseph on Jun 15, 2024
Verified
Collecting banks give to a transferee the same basic warranties as those given by other parties who transfer commercial paper, except they also may give encoding warranties.
Encoding Warranties
Guarantees or assurances typically afforded to a product or service, presumed to follow standard encoding or presentation norms.
Commercial Paper
Short-term, unsecured promissory notes issued by corporations to finance their operations.
Transferee
An individual or entity that receives property, rights, or interests from another through a legal transfer.
- Comprehend the warranties and liabilities of collecting banks in the transfer of commercial paper.
Verified Answer
BK
Brenda KizerJun 21, 2024
Final Answer :
True
Explanation :
Collecting banks, when transferring commercial paper, provide the same basic warranties as other transferors, such as the genuineness of the instrument and the right to enforce it, but they also provide additional warranties related to the encoding of the item, such as ensuring that the encoding was done properly and according to applicable standards.
Learning Objectives
- Comprehend the warranties and liabilities of collecting banks in the transfer of commercial paper.