cheeseman_buslaw7_tif_24

cheeseman_buslaw7_tif_24 - 24 LIABILITY,DEFENSESAND...

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1) A party can incur contract liability on a negotiable instrument only if that party's signature appears on the instrument. Answer: TRUE Diff: 2 Topic: Signature Liability of Parties 2) Contract liability is another term used to refer to signature liability. Answer: TRUE Diff: 1 Topic: Signature Liability of Parties 3) If an unauthorized agent signs a note on behalf of a principal, then only the agent is liable on the note. Answer: TRUE Diff: 2 Topic: Signature Liability of Parties 4) When a drawee accepts a draft, the drawee becomes secondarily liable on the draft, because the drawer has the primary liability for payment. Answer: FALSE Diff: 2 Topic: Signature Liability of Parties 5) The drawer of a draft has primary liability on the draft when it is issued. Answer: FALSE Diff: 2 Topic: Signature Liability of Parties 6) Certification of a check by the drawee bank makes the bank primarily liable. Answer: TRUE Diff: 2 Topic: Signature Liability of Parties 4 LIABILITY, DEFENSES AND  DISCHARGE 24
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7) Drawers of checks and drafts and unqualified indorsers are secondarily liable on negotiable instruments. Answer: TRUE Diff: 1 Topic: Signature Liability of Parties 8) A qualified indorser will incur secondary, rather than primary, liability. Answer: FALSE Diff: 1 Topic: Signature Liability of Parties 9) Before a party can be held secondarily liable on an instrument, that party must have received a timely notice that the instrument was dishonored. Answer: TRUE Diff: 1 Topic: Signature Liability of Parties 10) An accommodation party who signs an instrument guaranteeing payment is secondarily liable on the instrument. Answer: FALSE Diff: 2 Topic: Signature Liability of Parties 11) The location of a person's signature on an instrument generally determines the signer's capacity. Answer: TRUE Diff: 2 Topic: Signature Liability of Parties 12) Qualified indorsers and agents that properly sign a negotiable instrument are not primarily or secondarily liable on the instrument. Answer: TRUE Diff: 2 Topic: Signature Liability of Parties 13) An unauthorized signature may be ratified. Answer: TRUE Diff: 2 Topic: Signature Liability of Parties 5
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14) Primary liability occurs when a draft or check is issued, as such instruments are orders to pay. Answer: FALSE Diff: 2 Topic: Primary Liability 15) A check, which is a special form of a draft, is accepted when it is certified by a bank. Answer: TRUE Diff: 1 Topic: Primary Liability 16) Drawers of checks and drafts have secondary liability on the instruments. Answer: TRUE Diff: 1 Topic: Secondary Liability 17) Unqualified indorsers must pay any dishonored instrument to the holder or to any subsequent according to its terms, when issued or properly completed. Answer:
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cheeseman_buslaw7_tif_24 - 24 LIABILITY,DEFENSESAND...

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