Exam 33: Liability of Parties

In the event of a breach of a presentment warranty:

Chin wants to buy a small parcel of land.The seller requires a certified check as payment.Chin has a checking account with ABC bank;he prepares a check for the seller and then has the bank certify it.He then presents the check to the seller.Who may now be liable for payment of the amount of the check?

Which of the following is true regarding a drawee's liability on a check or a draft?

Which of the following is true regarding an indorser's liability on a note?

The maker of a promissory note is the person who is secondarily liable on the note.

How can an indorser avoid secondary liability on the instrument? Can an indorser disclaim transfer warranty liability?

The notice required of a dishonored check from the drawer to an indorser to hold the indorsers' to their contractual obligation can be either written or oral.

Any authorized ownership and exercise over an instrument is referred to as conversion.

Menzes is the Treasurer of ABC Corp.As such,he is authorized to sign checks for the corporation.A supplier bills ABC for a legitimate obligation.Menzes makes out a check to the supplier and signs it "ABC Corp. ,by Menzes,Treasurer." Who is liable on this check?

Dick steals a computer belonging to Tom from his house.Then Dick represents himself as Tom and sells the computer to Lawrence.Here,Lawrence draws a check payable to Tom and delivers the check to Tom.Here,Tom is called the impostor.

The UCC provides for a transfer warranty on unauthorized or repetitive remotely created checks.

The rationale for the impostor rule is that the responsibility for determining the true identity of the payee:

Mike authorizes his agent,Ben to borrow a sum of $10,000 on his behalf from the National Bank.Ben signs his name to a note without disclosing that the signature was on behalf of Mike.Who is liable on the note?

Revised Article 3 of the UCC provides that the drawer of a cashier's check has the same obligation as the issuer of a note.

Which of the following is both a transfer warranty and a presentment warranty? Assume that the instrument in question is a draft.

According to Revised Article 3 if a bank pays a check that contains a forged indorsement:

Jerry Hall makes out a note for $100 in such a way that someone could alter it to read $100,000.Someone alters the note and negotiates it to Pete Mason,who can qualify as a holder in due course.Which of the following statements is true for this situation?

Jones,a purchasing manager at the XYZ Corporation,has authority to make and sign checks drawn on the corporation's account.Jones completes a fake check to the Smith Supply Company for $100,000,signs it for XYZ,indorses it in Smith's name,and sells it to Hirsch,who takes it in good faith.Has the check been negotiated to Hirsch? Assume that the check is a negotiable instrument.

Suzy gets Joe to fix her computer while she is on vacation.Because she does not know how much the job will cost,she gives Joe a signed blank check with Joe as the payee.Joe,of course,is supposed to fill in the correct amount and cash the check at Suzy's bank.The job costs $200,but Joe fills out the check for $10,000 and then negotiates it to Harry.Harry takes the check in good faith,for value,and without notice of the false addition.Assuming that Suzy's bank does not pay to Harry and Harry pursues her on her secondary liability,does Suzy have an alteration defense against Harry?

All of the following constitute transfer warranties under Article 3 except: