Exam 27: Liability Defenses and Dischapterarge

The appropriate time for presentment of a negotiable instrument for payment is determined by

Ana issues a check drawn on Best Bank payable to the order of Best, who indorses the check and cashes it at Discount Mart. Discount deposits the check into the store's account at El Centro Credit, which presents it for payment to Best Bank. The drawee's payment of the check in good faith to El Centro discharges the liability of

When a person claims to have been deceived into signing a negotiable instrument by being told it is something else, the level of his or her intelligence may determine whether he or she should have understood the nature of the deal before signing.

Flo is an administrative assistant with Global Shipping Corporation, but has no authority to sign Global checks. Flo orders merchandise from Home Furnishings Company delivered to her apartment and pays with a Global check, signing "Global Shipping Corp. by Flo, admin. assist." Home does not know that Flo has no authority to sign the check. Who is liable on the check, and why?

It is not a material alteration to change the figures on a check so that they agree with the written amount, and thus, any holder is entitled to enforce the check.

Because a maker who issues an incomplete note will normally be liable for payment even if the note is later completed in an unauthorized manner, the alteration can be claimed as a defense against an HDC.

Liability for payment on a negotiable instrument extends only to those who sign the instrument.

It is assumed that a drawer or maker will recognize his or her own signature and that a maker or an acceptor will recognize whether an instrument has been materially altered. Therefore, with respect to any of these parties who in good faith accepts an instrument, in terms of presentment warranties,

A parent who co-signs a note for a student loan with his or her son or daughter is primarily liable if the note states the co-signers "collectively" promise to pay.

Presentment warranties protect the party to whom an altered instrument is presented because they have the effect of shifting liability back to the party who was in the best position to prevent the wrongdoing.

Asa executes a preprinted promissory note to Business Loans without filling in the due date. The bank does not complete the form by adding the date. Asa is

Employers Company draws a check payable to Felipe. Felipe indorses the back and negotiates the check to Guarantors Bank. Primarily liable on the check is