Exam 26: Liability of Parties

The signature of the maker of a note may be typewritten or signed by means of a signature stamp so long as it represents a present intention to authenticate the instrument.

Misty wrote a check to Acme for $220. She is discharged from liability on the check if Acme does not present the check for payment within 30 days after the date the check was signed.

An accommodation party's liability is determined by the capacity in which he signs.

Discharge applies to the individual, not to the instrument, and a person's liability may be discharged with regard to one party but not to another.

An accommodation maker is not liable on a note since he only agreed to sign as a favor to the maker.

Which of the following is true of warranty liability as it affects negotiable instruments?

Elder, an authorized agent for Mullins, signs a negotiable instrument, "Mullins, principal, by Elder, agent." Mullins has primary liability and Elder has secondary liability on the instrument.

Checks, when accepted, are said to be certified.

Morgan is the maker of a promissory note payable to Hillary on August 29. If Hillary fails to make proper presentment of the note to Morgan on August 29, Morgan's liability on the note is not affected.

The time for dishonor of a check can vary greatly depending on the number of banks involved in the collection process.

Sarah has a checking account at First Bank. Orrin steals one of her blank checks, writes a check for $250, and then forges Sarah's signature. He then presents the check to First Bank for payment. First Bank pays the forged instrument. Which of the following statements is correct?

On the due date, Merrel makes proper tender of full payment of a note to Russell, who is entitled to payment. If Russell refuses payment, Merrel is discharged from liability for: