1. Indorsers are not contractually liable on negotiable instruments they indorse
ID: 1134277 • Letter: 1
Question
1.
Indorsers are not contractually liable on negotiable instruments they indorse.
True False
2.
Signing a promissory note is an example of establishing primary liability in a negotiable instrument.
True False
3.
The maker of a promissory note is the person who is secondarily liable on the note.
True False
4.
Revised Article 3 of the UCC provides that the drawer of a cashier's check has the same obligation as the issuer of a note.
True False
5.
A drawee has no liability on a draft unless it certifies or accepts the draft.
True False
6.
An indorser to a negotiable instrument is generally primarily liable.
True False
7.
The negotiable instruments of a corporation have to be signed by an agent of the corporation who is authorized to sign the instrument.
True False
8.
Bob authorizes Steward to borrow money on his behalf. Steward signs his name on a note in his individual capacity i.e. without disclosing that the signature is on behalf of Bob. Then Steward becomes liable for the note.
True False
9.
Susie Q. signs a promissory note with her typical signature, a X. Susie's mark will be sufficient to be considered a signature and establish liability in the instrument.
True False
10.
A holder of a check or draft who wants to get payment on it should first present the check or draft to the drawer.
True False
11.
The notice required of a dishonored check from the drawer to an indorser to hold the indorsers' to their contractual obligation can be either written or oral.
True False
12.
An indorsing transferor of a negotiable instrument makes six transfer warranties to all subsequent transferees.
True False
13.
Warranties do not apply without the indorsement of the transferor.
True False
14.
The UCC provides for a transfer warranty on unauthorized or repetitive remotely created checks.
True False
15.
A transferor of a negotiable instrument for consideration warrants to his transferee that the negotiable instrument has not been altered.
True False
16.
Presentment warranties are made by any prior transferor of the instrument at the time the person transfers the instrument.
True False
17.
Jason has knowledge of the fact that the check given to him bears Julie's forged signature. Despite the said fact, he presents the check to ABC Bank. ABC Bank pays Jason, under a mistaken belief that the signature on the check is authentic. Bank cannot recover that payment from Jason.
True False
18.
Dill steals a computer belonging to Tom from his house. Then Dill represents himself as Tom and sells the computer to Lawrence. Here, Lawrence draws a check payable to Tom and delivers the check to Tom. Here, Tom is called the impostor.
True False
19.
Any authorized ownership and exercise over an instrument is referred to as conversion.
True False
20.
Potter owes George $500. Potter writes a check payable to George for that amount. Later, George loses the check. Potter is now discharged from his liability on the check.
True False
21.
UCC section 3-604 allows for the liability associated with a negotiable instrument to be canceled by the person entitled to enforce the instrument.
True False
1.
Indorsers are not contractually liable on negotiable instruments they indorse.
True False
Explanation / Answer
1. FALSE
Indorsers are liable on the contractual instruments they indorse and they are contractually liable to pay on the instrument.
2. TRUE.
"Signature" is the primary key to liability in any negotiable instrument.
3. TRUE.
The maker of a promissory note is secondarily liable for paying the debt.
4) TRUE.
Revised Article 3 of UCC states that, the drawer of a cashiers check has the same obligation as the maker or issuer of a note.
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