§ 41-08-32 — (8-306) Effect of guaranteeing signature, endorsement, or instruction

North Dakota § 41-08-32

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-08: Investment Securities

Text

1. A person who guarantees a signature of an endorser of a security certificate warrants
that at the time of signing:
a. The signature was genuine;
b. The signer was an appropriate person to endorse, or if the signature is by an
agent, the agent had actual authority to act on behalf of the appropriate person;
and
c. The signer had legal capacity to sign.
2. A person who guarantees a signature of the originator of an instruction warrants that at
the time of signing:
a. The signature was genuine;
b. The signer was an appropriate person to originate the instruction, or if the
signature is by an agent, the agent had actual authority to act on behalf of the
appropriate person, if the person specified in the instruction as the registered
owner was, in fact, the registered owner, as to which fact the signature guarantor
does not make a warranty; and
c. The signer had legal capacity to sign.
3. A person who specially guarantees the signature of an originator of an instruction
makes the warranties of a signature guarantor under subsection 2 and also warrants
that at the time the instruction is presented to the issuer:
a. The person specified in the instruction as the registered owner of the
uncertificated security will be the registered owner; and
b. The transfer of the uncertificated security requested in the instruction will be
registered by the issuer free from all liens, security interests, restrictions, and
claims other than those specified in the instruction.
4. A guarantor under subsections 1 and 2 or a special guarantor under subsection 3 does
not otherwise warrant the rightfulness of the transfer.
5. A person who guarantees an endorsement of a security certificate makes the
warranties of a signature guarantor under subsection 1 and also warrants the
rightfulness of the transfer in all respects.
6. A person who guarantees an instruction requesting the transfer of an uncertificated
security makes the warranties of a special signature guarantor under subsection 3 and
also warrants the rightfulness of the transfer in all respects.

7. An issuer may not require a special guaranty of signature, a guaranty of endorsement,
or a guaranty of instruction as a condition to registration of transfer.
8. The warranties under this section are made to a person taking or dealing with the
security in reliance on the guaranty, and the guarantor is liable to the person for loss
resulting from their breach. An endorser or originator of an instruction whose signature,
endorsement, or instruction has been guaranteed is liable to a guarantor for any loss
suffered by the guarantor as a result of breach of the warranties of the guarantor.