Canada Business Corporations Act

Marginal note:Warranties to issuer

• 63 (1) A person who presents a security for registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment or exchange, except that a purchaser for value without notice of an adverse claim who receives a new, reissued or re-registered security on registration of transfer warrants only that the purchaser has no knowledge of any unauthorized signature in a necessary endorsement.

• Marginal note:Warranties to purchaser

  (2) A person by transferring a security to a purchaser for value warrants only that

  • (a) the transfer is effective and rightful;

  • (b) the security is genuine and has not been materially altered; and

  • (c) the person knows of nothing that might impair the validity of the security.

• Marginal note:Warranties of intermediary

  (3) Where a security is delivered by an intermediary known by the purchaser to be entrusted with delivery of the security on behalf of another or with collection of a draft or other claim to be collected against such delivery, the intermediary by such delivery warrants only the intermediary’s good faith and authority even if the intermediary has purchased or made advances against the draft or other claim to be collected against the delivery.

• Marginal note:Warranties of pledgee

  (4) A pledgee or other holder for purposes of security who redelivers a security received, or after payment and on order of the debtor delivers that security to a third person, gives only the warranties of an intermediary under subsection (3).

• Marginal note:Warranties of broker

  (5) A broker gives to a customer, to the issuer or to a purchaser, as the case may be, the warranties provided in this section and has the rights and privileges of a purchaser under this section, and those warranties of and in favour of the broker acting as an agent or mandatary are in addition to warranties given by the customer and warranties given in favour of the customer.