Question 1

The appropriate time for presentment of a negotiable instrument for payment is determined by

Accepted Answer

A)  the nature of the instrument.
B)  all of the choices.
C)  any usage of banking or trade.
D)  the facts of the particular situation.E) A) and D)
F) C) and D)

Question 2

Because a maker who issues an incomplete note will normally be liable for payment even if the note is later completed in an unauthorized manner, the alteration can be claimed as a defense against an HDC.

Accepted Answer

A) True 
 B)False

Question 3

When a person claims to have been deceived into signing a negotiable instrument by being told it is something else, the level of his or her intelligence may determine whether he or she should have understood the nature of the deal before signing.

Accepted Answer

A) True 
 B)False

Question 4

It is assumed that a drawer or maker will recognize his or her own signature and that a maker or an acceptor will recognize whether an instrument has been materially altered. Therefore, with respect to any of these parties who in good faith accepts an instrument, in terms of presentment warranties,

Accepted Answer

A)  none of them apply.
B)  only the warranty that the person obtaining acceptance is entitled to enforce the instrument applies.
C)  only the warranties that the instrument has not been altered and that the person obtaining acceptance has no knowledge of an unauthorized signature apply.
D)  all of them apply.E) A) and C)
F) A) and B)

Question 5

Employers Company draws a check payable to Felipe. Felipe indorses the back and negotiates the check to Guarantors Bank. Primarily liable on the check is

Accepted Answer

A)  Employers Company.
B)  Felipe.
C)  Guarantors Bank.
D)  none of the choices.E) A) and B)
F) None of the above

Question 6

Flo is an administrative assistant with Global Shipping Corporation, but has no authority to sign Global checks. Flo orders merchandise from Home Furnishings Company delivered to her apartment and pays with a Global check, signing "Global Shipping Corp. by Flo, admin. assist." Home does not know that Flo has no authority to sign the check. Who is liable on the check, and why?

Accepted Answer

Flo is liable on the check, and Global i...

Question 7

It is not a material alteration to change the figures on a check so that they agree with the written amount, and thus, any holder is entitled to enforce the check.

Accepted Answer

A) True 
 B)False

Question 8

Asa executes a preprinted promissory note to Business Loans without filling in the due date. The bank does not complete the form by adding the date. Asa is

Accepted Answer

A)  not liable for payment on the note.
B)  secondarily liable for payment on the note.
C)  obligated to pay the note.
D)  liable for payment on the note only at his option.E) A) and D)
F) None of the above

Question 9

Presentment warranties protect the party to whom an altered instrument is presented because they have the effect of shifting liability back to the party who was in the best position to prevent the wrongdoing.

Accepted Answer

A) True 
 B)False

Question 10

Ana issues a check drawn on Best Bank payable to the order of Best, who indorses the check and cashes it at Discount Mart. Discount deposits the check into the store's account at El Centro Credit, which presents it for payment to Best Bank. The drawee's payment of the check in good faith to El Centro discharges the liability of

Accepted Answer

A)  none of the parties.
B)  all of the parties.
C)  Ana and Best Bank only.
D)  Best Bank only.E) All of the above
F) A) and D)

Question 11

Liability for payment on a negotiable instrument extends only to those who sign the instrument.

Accepted Answer

A) True 
 B)False

Question 12

A parent who co-signs a note for a student loan with his or her son or daughter is primarily liable if the note states the co-signers "collectively" promise to pay.

Accepted Answer

A) True 
 B)False

Exam 27: Liability Defenses and Dischapterarge

Because a maker who issues an incomplete note will normally be liable for payment even if the note is later completed in an unauthorized manner, the alteration can be claimed as a defense against an HDC.

Correct Answer
verified

It is assumed that a drawer or maker will recognize his or her own signature and that a maker or an acceptor will recognize whether an instrument has been materially altered. Therefore, with respect to any of these parties who in good faith accepts an instrument, in terms of presentment warranties,

Correct Answer
verified

A parent who co-signs a note for a student loan with his or her son or daughter is primarily liable if the note states the co-signers "collectively" promise to pay.

Correct Answer
verified

Correct Answer
verified

Employers Company draws a check payable to Felipe. Felipe indorses the back and negotiates the check to Guarantors Bank. Primarily liable on the check is

Correct Answer
verified

Liability for payment on a negotiable instrument extends only to those who sign the instrument.

Correct Answer
verified

Correct Answer
verified
Flo is liable on the check, and Global i...
View Answer

When a person claims to have been deceived into signing a negotiable instrument by being told it is something else, the level of his or her intelligence may determine whether he or she should have understood the nature of the deal before signing.

Correct Answer
verified

Asa executes a preprinted promissory note to Business Loans without filling in the due date. The bank does not complete the form by adding the date. Asa is

Correct Answer
verified

Presentment warranties protect the party to whom an altered instrument is presented because they have the effect of shifting liability back to the party who was in the best position to prevent the wrongdoing.

Correct Answer
verified

It is not a material alteration to change the figures on a check so that they agree with the written amount, and thus, any holder is entitled to enforce the check.

Correct Answer
verified

The appropriate time for presentment of a negotiable instrument for payment is determined by

Correct Answer
verified

Exam 27: Liability Defenses and Dischapterarge

Because a maker who issues an incomplete note will normally be liable for payment even if the note is later completed in an unauthorized manner, the alteration can be claimed as a defense against an HDC.

Correct AnswerverifiedShow Answer

It is assumed that a drawer or maker will recognize his or her own signature and that a maker or an acceptor will recognize whether an instrument has been materially altered. Therefore, with respect to any of these parties who in good faith accepts an instrument, in terms of presentment warranties,

Correct AnswerverifiedShow Answer

A parent who co-signs a note for a student loan with his or her son or daughter is primarily liable if the note states the co-signers "collectively" promise to pay.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Employers Company draws a check payable to Felipe. Felipe indorses the back and negotiates the check to Guarantors Bank. Primarily liable on the check is

Correct AnswerverifiedShow Answer

Liability for payment on a negotiable instrument extends only to those who sign the instrument.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedFlo is liable on the check, and Global i...View AnswerShow Answer

When a person claims to have been deceived into signing a negotiable instrument by being told it is something else, the level of his or her intelligence may determine whether he or she should have understood the nature of the deal before signing.

Correct AnswerverifiedShow Answer

Asa executes a preprinted promissory note to Business Loans without filling in the due date. The bank does not complete the form by adding the date. Asa is

Correct AnswerverifiedShow Answer

Presentment warranties protect the party to whom an altered instrument is presented because they have the effect of shifting liability back to the party who was in the best position to prevent the wrongdoing.

Correct AnswerverifiedShow Answer

It is not a material alteration to change the figures on a check so that they agree with the written amount, and thus, any holder is entitled to enforce the check.

Correct AnswerverifiedShow Answer

The appropriate time for presentment of a negotiable instrument for payment is determined by

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Flo is liable on the check, and Global i...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified