Exam 24: Liability, Defenses, and Discharge

An instrument is not considered canceled if it is destroyed or mutilated by accident or by an unauthorized third party.

Harold borrows $20,000 from Alex and signs a note promising to pay Alex this amount plus interest in one year. Alex negotiates the note to Reese, an HDC. Before the note is due, Harold declares bankruptcy. According to the discharge in bankruptcy defense, which of the following is true?

Those who are secondarily liable on negotiable instruments they endorse are known as ________.

In the context of instruments that are merely promises to pay, which of the following has primary liability?

The holder of a negotiable instrument can discharge the liability of any party to the instrument by cancellation.

A signature in the lower-right corner of a promissory note indicates that the signer is the maker of the note.

Transfer warranties cannot be disclaimed with respect to checks.

Absolute liability to pay a negotiable instrument, subject to certain universal or real defenses is known as ________.

Which of the following is a similarity between the fictitious payee rule and the imposter rule?

List the presentment warranties related to negotiable instruments.

Which of the following is a rule that eliminates HDC status with regard to negotiable instruments that arise out of certain consumer credit transactions?

A signature on a negotiable instrument can be any name, word, or mark used in lieu of a written signature.

Personal and universal defenses can be raised against a normal holder of a negotiable instrument.

A(n) ________ is an action or event that relieves certain parties from liability on negotiable instruments.

An agent is only liable on the instrument that he or she signs in if it clearly mentions the principal.

Which of the following actions by the holder causes an impairment of the right of recourse?

Extreme duress is considered a personal defense.

Transfer warranties would be applicable to which of the following placements of a negotiable instrument?

Those who disclaim liability and are not secondarily liable on instruments they endorse are referred to as ________.

In which of the following is an accommodation party primarily liable?