Exam 26: Liability of Parties

Parties with secondary liability unconditionally promise to pay the instrument.

Which of the following is a warranty of the transferor?

What is the difference between the liability of a qualified indorser and an unqualified indorser? Does the fact that a person has given a qualified indorsement mean that the person has no liability?

The UCC excuses presentment for payment or acceptance if:

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

Mark gives a bearer note for $50 to Joe in exchange for an excellent dinner at Joe's restaurant.Joe delivers the note to Sue for $50 and Sue takes it to Mark to be paid.If Mark says the note was originally written for only $5,what can Sue do?

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.

Arthur is the payee of a negotiable promissory note on which Brian is the maker.Arthur indorses the note in blank and delivers it to Clark,who then transfers it to David without indorsement.David presents it to Brian for payment when it becomes due,but Brian claims he signed the note based upon fraud in the inducement and refuses to pay. a.Who is primarily liable on the instrument? Who is secondarily liable on the instrument? b.Who has warranty liability? Why? c.From whom can David try to collect now that Brian refuses to pay?

Kelly wrote a check to Trish,which Trish immediately changed from $20 to $120.She negotiated the check to Carl for value,who in turn took it to Kelly's bank for certification.Kelly's bank checked his account and certified the check since there were sufficient funds to cover the check.Thereafter,Carl gave the check to General Motors as part of the down payment for his car.G.M.presents the check to Kelly's bank for payment and they discover the alteration.The bank:

An acceptance must be written on the draft.

A drawee bank's refusal to certify a check constitutes dishonor of 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 acceptor should always indicate on the instrument the amount accepted.

Discuss the reasons (explained in the "Business Law in Action" feature in the textbook)most banks instruct their tellers to obtain indorsements on all checks,including those made payable to "Cash."

The maker is the primary party on every note.

The use of the qualifying word(s)__________ is/are understood to place purchasers on notice that they may not rely on the credit of the person using this language.

When a severe weather warning has been declared,a delay in notice of dishonor is excused to the reasonably diligent holder who was prevented from posting the notice.

"Presentment" is necessary within 10 days of the date of issuance of a check.

Any kind of notice of dishonor that informs the recipient of potential liability is sufficient.

To certify a check,the bank must: