Effect of Guaranteeing Signature, Indorsement, or Instruction

Section 8--306. Effect of Guaranteeing Signature, Indorsement, or\n Instruction.\n (a) A person who guarantees a signature of an indorser of a security\ncertificate warrants that at the time of signing:\n (1) the signature was genuine;\n (2) the signer was an appropriate person to indorse, or if the\n signature is by an agent, the agent had actual authority to\n act on behalf of the appropriate person; and\n (3) the signer had legal capacity to sign.\n (b) A person who guarantees a signature of the originator of an\ninstruction warrants that at the time of signing:\n (1) the signature was genuine;\n (2) the signer was an appropriate person to originate the\n instruction, or if the signature is by an agent, the agent\n had actual authority to act on behalf of the appropriate\n person, if the person specified in the instruction as the\n registered owner was, in fact, the registered owner, as to\n which fact the signature guarantor does not make a warranty;\n and\n (3) the signer had legal capacity to sign.\n (c) A person who specially guarantees the signature of an originator\nof an instruction makes the warranties of a signature guarantor under\nsubsection (b) and also warrants that at the time the instruction is\npresented to the issuer:\n (1) the person specified in the instruction as the registered\n owner of the uncertificated security will be the registered\n owner; and\n (2) the transfer of the uncertificated security requested in the\n instruction will be registered by the issuer free from all\n liens, security interests, restrictions, and claims other\n than those specified in the instruction.\n (d) A guarantor under subsections (a) and (b) or a special guarantor\nunder subsection (c) does not otherwise warrant the rightfulness of the\ntransfer.\n (e) A person who guarantees an indorsement of a security certificate\nmakes the warranties of a signature guarantor under subsection (a) and\nalso warrants the rightfulness of the transfer in all respects.\n (f) A person who guarantees an instruction requesting the transfer of\nan uncertificated security makes the warranties of a special signature\nguarantor under subsection (c) and also warrants the rightfulness of the\ntransfer in all respects.\n (g) An issuer may not require a special guaranty of signature, a\nguaranty of indorsement, or a guaranty of instruction as a condition to\nregistration of transfer.\n (h) The warranties under this section are made to a person taking or\ndealing with the security in reliance on the guaranty, and the guarantor\nis liable to the person for loss resulting from their breach. An\nindorser or originator of an instruction whose signature, indorsement,\nor instruction has been guaranteed is liable to a guarantor for any loss\nsuffered by the guarantor as a result of breach of the warranties of the\nguarantor.\n