Ch26-TB1-WBL-10e - Chapter26...

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Chapter 26 Liability, Defenses, and Discharge N.B.:   TYPE  indicates that a question is new, modified, or unchanged, as  follows. N A question  new  to this edition of the Test Bank. + A question  modified  from the previous edition of the Test Bank, = A question  included  in the previous edition of the Test Bank. TRUE/FALSE QUESTIONS 1. A signature may be typed. ANSWER: T PAGE: 515 TYPE: + 2. A signature may be handwritten. ANSWER: T PAGE: 515 TYPE: + 3. Signature   liability   extends   to   any   person   who   signs   a   negotiable   in- strument. ANSWER: T PAGE: 515 TYPE: = 4. A maker is secondarily liable on an instrument. ANSWER: F PAGE: 516 TYPE: N 5. A drawer’s liability does not arise until presentment and notice of dishonor. 3
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4 TEST BANK 1—UNIT FIVE: NEGOTIABLE INSTRUMENTS ANSWER: T PAGE: 516 TYPE: +
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CHAPTER 26: LIABILITY, DEFENSES, AND DISCHARGE 5 6. To properly present a draft for payment, the holder must present it to the  drawer. ANSWER: F PAGE: 517 TYPE: = 7. An accommodation  maker  is secondarily liable on an instrument. ANSWER: F PAGE: 520 TYPE: = 8. In general, an agent must clearly indicate that he or she is signing on  behalf of a clearly named principal to bind the principal. ANSWER: T PAGE: 521  TYPE: = 9. An authorized agent may be personally liable on an instrument if the agent  signs the agent’s name but not the principal’s name. ANSWER: T PAGE: 521 TYPE: = 10. An unauthorized signature binds the person whose name is forged. ANSWER: F PAGE: 521 TYPE: N 11. A drawer who is induced by an imposter to issue a check in the name of an  impersonated payee can avoid payment on the check to an innocent holder. ANSWER: F PAGE: 522 TYPE: = 12. A person who transfers an instrument warrants to any other person who in  good faith accepts it (with exceptions) that it has not been altered. ANSWER: T PAGE: 524 TYPE: + 13. Fraud   in   the   execution   occurs   whenever   someone   signs   an   instrument  before all essential terms have been completed. ANSWER: F PAGE: 526 TYPE: = 14. A drawer’s  discharge in bankruptcy will defeat the claim of an HDC for  payment on a check issued by the drawer. ANSWER: T PAGE: 527 TYPE: =
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6 TEST BANK 1—UNIT FIVE: NEGOTIABLE INSTRUMENTS 15. Personal defenses defeat the claims of HDCs. ANSWER: F PAGE: 527 TYPE: =
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CHAPTER 26: LIABILITY, DEFENSES, AND DISCHARGE 7 16. When a person signs a negotiable instrument under extreme duress, the  instrument is enforceable only by an HDC. ANSWER: F PAGE: 527 TYPE: = 17. The defense of illegality is always a personal defense. ANSWER: F PAGE: 527 TYPE: + 18. The defense of minority is always a universal defense.
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