Exam 40: Liability of Parties

Ivan is a representative of Sigma Inc.,Checks are drawn by "Sigma Inc.,Payroll Account (signed) D. Ivan," but the checks are not paid. Who is liable on the instrument-the individual or the corporation?

James draws a check on his account at Harper Bank payable to the order of Terry.James does not ask Harper Bank to accept or certify the check.If Harper Bank does not pay the check when Terry presents it for payment,then:

Which of the following statements is true of primary liability on a check when it is issued?

A holder in due course may discharge the liability of the parties to the instrument by:

If a holder has indorsed a negotiable instrument restrictively indorsed,the person who pays must comply with the restrictive indorsement to be discharged.

Which of the following statements is true of the obligation of the maker?

Anne borrows $2,000 from Jerry and gives him a promissory note for $2,000 at 10 percent annual interest payable in 100 days.Jerry indorses the note "Pay to the order of Ethan" and negotiates the note to Ethan.At the end of 100 days,Ethan takes the note to Anne.Under these circumstances,if Anne _____.

A nonindorsing transferor makes:

Which of the following statements is true of the obligations of a maker?

If someone signs a person's name to a negotiable instrument without that person's authorization,the signature binds the person whose name appears.

A holder may find it easier to prove her status as a holder in due course against a maker or drawer than to return the instrument to a transferor on the ground of breach of warranty.

If a person has been negligent in signing a negotiable instrument,she may use the lack of authorization as a reason for not paying a person who in good faith pays for it.

A fraudulent alteration discharges any party whose obligation is affected by the alteration whether the party assents or not.

Which of the following is true of the obligations of an acceptor?

A person who transfers a negotiable instrument to someone else and for consideration makes five warranties to his immediate transferee.

"Responsibility" with respect to instruments means the authority to:

Peter draws a check on his account at Wright Bank payable to the order of Stella.Peter asks Wright Bank to certify the check and the bank certifies it.Stella presents the check to Wright Bank for payment.Which of the following statements is true of this case?

If a drawee bank mistakenly paid a check over a stop-payment order,the bank cannot recover if it paid the check to a presenter who had taken the instrument in good faith and for value.

A drawee has no liability on a check or other draft unless it certifies or accepts the check or draft.

Under Revised Article 3 of the Uniform Commercial Code rules for beneficiaries,in the event of a breach of transfer warranty,_____.