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Questions and Answers
Who is considered primarily liable for a promissory note?
Who is considered primarily liable for a promissory note?
Who is classified as secondarily liable for a bill of exchange?
Who is classified as secondarily liable for a bill of exchange?
When does a drawee become an acceptor?
When does a drawee become an acceptor?
What distinguishes a primarily liable party from a secondarily liable party?
What distinguishes a primarily liable party from a secondarily liable party?
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According to the general rule, when is a person liable on an instrument?
According to the general rule, when is a person liable on an instrument?
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Study Notes
Liability on Instruments
- The maker of a promissory note is considered primarily liable.
- The indorser of a bill of exchange is classified as secondarily liable.
- A drawee becomes an acceptor when they sign their acceptance of the bill of exchange.
- A primarily liable party is responsible for the payment of the instrument, whereas a secondarily liable party is responsible only if the primary party defaults.
- According to the general rule, a person is liable on an instrument when they sign it as a maker, drawer, or indorser.
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Description
Test your knowledge of the liability of parties in negotiable instruments with this quiz. Explore the classification of parties based on their liability and understand the obligations of the maker of a negotiable instrument.
