What is presentment warranty of a negotiable instrument?

Presentment warranty applies when a person entitled to payment of an instrument presents it to a maker or drawee for payment. The presenter warrants to a good faith payor the following:

• Enforceability – She is entitled to enforce the instrument,
• No Alterations – The terms of the instrument are genuine and there have been no alterations, and
• No Forgeries – The drawer of the instruments signature is genuine.

Presentment warranties generally apply to drafts, as all drafts must be presented for payment. This warranty is broader than the name implies. A payor of an instrument can enforce these warranty provisions against the presenter and all prior transferors of the instrument. The theory is that any transferor of the instrument represents that the instrument may be presented for payment in accordance with the above warranties.

Note: Presentment warranty may be disclaimed in certain drafts, but cannot be disclaimed for checks.