BLAW26 - Chapter 26 Liability Defenses and Discharge A1 B1...

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Chapter 26 Liability, Defenses, and Discharge A1. Ethel signs a note “payable to the order of Fidelity Bank.” Fidelity indorses the note in blank and negotiates it to Ghani, who sells it to Huck. Liability associated with the transfer of the note from Ghani to Huck is a. fitness. b. quality. c. signature. d. warranty. B1. Biff signs a note “payable to the order of County Credit Union.” Unless Biff has a valid defense against payment, Biff’s liability on this note is a. lateral. b. primary. c. secondary. d. tertiary. A2. Puck signs a check “pay to the order of Quik Mart” drawn on Puck’s account in Regional Bank. Puck shows the check to Silky, who agrees that the signature is Puck’s and that Quik Mart is owed the amount that the check represents. Quik Mart signs the back of the check. Liability on this check extends to a. Puck, Quik Mart, and Regional Bank. b. Puck and Quik Mart only. c. Puck and Silky only. d. Silky only. B2. Eula signs a check “pay to the order of Eula” and presents to First National Bank for payment. The types of liability associated with this check are a. fitness and quality. b. potential and real. c. sealed and delivered. d. signature and warranty. A3. Toby signs a note “payable to the order of United Credit Union.” Unless Toby has a valid defense against payment, Toby’s liability on this note is a. immediate. b. imposed only after payment is demanded. c. postponed until the note is dishonored by United Credit Union. d. suspended until payment is due.
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B3. Grady signs a note “payable to the order of Home Mortgage Service,” and Home Mortgage takes possession of the note. The focus of any liability associated with this note is on a. any underlying contract between Grady and Home Mortgage. b. the fitness and quality of the instrument and its contract. c. the formalities of the instrument’s seal and its delivery. d. the instrument or related warranties. A4. Nero signs a check “pay to the order of Olive” drawn on Nero’s account in Plum Bank. Olive signs the back of the check. Secondary liability on this check extends to a. Nero and Olive only. b. Nero and Plum Bank only. c. Nero only. d. Plum Bank only. B4. Superior Company draws a check payable to Ted. Uri makes a note  payable to Vital Finance Corporation. Primarily liable parties include a. neither Superior nor Uri. b. Superior and Uri. c. Superior only. d. Uri only. A5. Dirk   is   the   maker   of   a   note,   on   which   Erv   is   secondarily   liable.  Friendly Credit Company is the current holder of the note. Erv will be  obligated to pay the note if a. Dirk defaults on the note. b.
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This note was uploaded on 09/13/2011 for the course BLAW 4203 taught by Professor Farguson during the Spring '11 term at LSU.

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BLAW26 - Chapter 26 Liability Defenses and Discharge A1 B1...

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