Exam 33: Liability of Parties

What form of liability exists when a party is only responsible to pay on a negotiable instrument in case of default of the party who shoulders the obligation of liability for the instrument?

Tom steals Dave's checkbook,completes a check for $1,000,forges Dave's signature,and gets payment from Tom's bank.The bank paid in good faith.Who is liable to the bank for the $1,000 in this case?

Warranties do not apply without the indorsement of the transferor.

If a person signs a check as an accommodation indorser:

What section of the UCC addresses enforcement of a negotiable interest that has been altered?

Usually,who may have the power to surrender the instrument if full payment is made?

National bank is reluctant to lend money to James and takes a note from him because of his shaky financial condition.However,the bank is willing to lend money to James if he signs the note and a friend also signs the note.Here the friend serves as the:

Maya Efrat,Chief Financial Officer for BAZ Inc. ,is authorized to sign checks for BAZ Inc.She signs a check "BAZ Inc.by Efrat,Chief Financial Officer." Which of the following statements is most accurate?

An indorsing transferor of a negotiable instrument makes six transfer warranties to all subsequent transferees.

The transferor of which of the following instrument cannot disclaim transfer warranties?

Bill submits a time card for a non-existent employee.The employer issues the payroll check.Bill forges the indorsement and negotiates the check to Ted.Which of the following statements holds true for this situation?

Indorsers are not contractually liable on negotiable instruments they indorse.

"Responsibility" with respect to instruments includes:

Penny draws a check for $25.00 on her Big Bank checking account payable to the order of Carol.Carol puts a "5" in front of the 2,raising the check to $525.00,and indorses it.She then negotiates the check to Mel.Mel then presents the check for payment to Big Bank,which pays her $525 and charges Penny's account that amount.Penny asks Big Bank to recredit her account for $500.00,and Big Bank does so.What recourse does the Bank have and against whom?

Which of the following is not one of the presentment warranties that the holder of an unaccepted draft makes to the drawee?

Mike signs a note payable to a bank.The bank indorses and negotiates the note to Fay,who then indorses and negotiates it to Sam.Sam presents the note to Mike,who dishonors it.Then Sam decides to pursue Fay and the bank on their secondary indorsers' liability.Against whom can Sam proceed?

Brian signs a promissory note for $500 payable to Harwich.Harwich indorses the note "Pay to order of Stephen,Harwich" and negotiates it to Stephen.Stephen fraudulently changes the $500 to $5,000.Under these circumstances,Brian is discharged from his liability as maker of note because:

Jack received a check as payment for the work he did.He indorsed the check "without recourse." What legal effect does this have?

The rationale for the fictitious payee rule is that:

The obligation of an acceptor is: