Exam 33: Liability of Parties

The notice required of a dishonored check from the drawer to an indorser to hold the indorsers to their contractual obligation can be either written or oral.

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

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

If a person signs a check as an accommodation indorser:

Salmond signs a note for the purpose of lending credit to John.Salmond also makes his father Richard sign the note because of his shaky financial condition.This indicates that Richard has signed the note in the capacity of a(n):

The rationale for the fictitious payee rule is that:

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

Chin wants to buy a small parcel of land.The seller requires a certified check as payment.Chin has a checking account with ABC bank;he prepares a check for the seller and then has the bank certify it.He then presents the check to the seller.Who may now be liable for payment of the amount of the check?

The ________ of a certified check has the same obligation as the maker or issuer of a note.

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

Presentment warranties are made by any prior transferor of the instrument at the time the person transfers the instrument.

According to UCC section 3-401 which of the following does NOT constitute a valid signature of a negotiable instrument?

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?

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 is true?

Dick steals a computer belonging to Tom from his house.Then Dick represents himself as Tom and sells the computer to Lawrence.Here,Lawrence draws a check payable to Tom and delivers the check to Tom.Here,Tom is called the impostor.

According to Revised Article 3 of the UCC,the risk of loss from fraudulent indorsements by employees:

The UCC provides for a transfer warranty on unauthorized or repetitive remotely created checks.

A representative is personally liable to a holder in due course that took the instrument without notice that the representative was not intended to be liable if:

If Jay signs Mila's name to a negotiable instrument without Mila's authorization or approval:

Which of the following is both a transfer warranty and a presentment warranty? Assume that the instrument in question is a draft.