Warranty of validity

The business promises the invoice is real, owed, and not already disputed.

Why it matters

If an invoice breaches this warranty, the factor may reject it, reserve against it, or require repurchase. The warranty often interacts with chargeback clauses.

Related terms

Related article: How to prepare invoices for factoring

Related reading

Sources

  • Uniform Commercial Code Article 9 - Uniform Law Commission. Accessed 2026-05-19. Reference for secured transactions concepts including receivables and filings.
  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.