10 Questions
Who is primarily liable on a promissory note?
Maker
What renders the instrument negotiable?
Maker's promise to pay
Who is secondarily liable in signature liability?
Indorser
When is the drawer of a draft (check) liable?
When the drawee fails to pay
What event triggers an indorser's liability?
Drawee's refusal to pay
Who is liable for the full amount on a negotiable instrument if there are multiple indorsements?
Indorser
When are parties secondarily liable on a negotiable instrument?
When the instrument is timely and properly presented but not honored
Which document does a drawer create?
Check (draft)
'Secondary liability' refers to the obligation of which party?
'Indorser'
In what condition does an 'indorser' become liable?
When the maker or drawee refuses to pay
Test your understanding of liability, defenses, and discharge related to negotiable instruments as covered in Chapter 27 of Business Law Text and Cases. Explore concepts such as signature liability and warranty liability associated with negotiable instruments.
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