Exam 40: Liability of Parties

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

A bank that cashes a check with a forged indorsement on it cannot be liable for conversion.

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

The terms of the contract of the parties to a negotiable instrument must be set out in the text of the instrument.

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

The terms of the contract of the parties to a negotiable instrument are set out:

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.

Devon draws a check payable to the order of Jen on his account at Big Bank.Jen properly negotiates the check to Seth,who sells the check to Andy.Seth indorsed without recourse.Andy deposits the check in his bank account at Mega Bank without indorsing the check.Who has liability to Mega Bank?