(1) A bank may become guarantor of the genuineness of a signature.
(2) A bank guaranteeing the signature of a person on any document warrants to any person relying on such guaranty only that:
The signature is that of a person signing;
The signer is the holder, or the signer has purported authority to sign in the name ofthe holder; except that, if the holder purports to act as a fiduciary, as "fiduciary" is defined either in this code or in article 1 of title 15, C.R.S., or if the holder's name is signed by a person purporting to act on the holder's behalf as such a fiduciary, the bank warrants that such holder or such person so signing as such fiduciary is in fact the fiduciary he or she purports to be and warrants that the bank has no actual knowledge that such fiduciary is committing a breach of such fiduciary's obligation as such fiduciary in signing such document and that it has no knowledge of such facts that its action in guaranteeing the signature amounts to bad faith; and (c) The signer has legal capacity to sign.
(3) A bank may disclaim in its guaranty all or any part of the obligations set forth in paragraph (b) of subsection (2) of this section.
Source: L. 2003: Entire article added with relocations, p. 1125, § 3, effective July 1.
Editor's note: This section is similar to former § 11-8-106 as it existed prior to 2003.