Asked by Stacie Batchelor on May 29, 2024
Verified
An investor who signs a note on behalf of a business is primarily liable and therefore has no right to reimbursement from the payee if the investor pays.
Primarily Liable
Being directly responsible or obligated to satisfy a debt or legal obligation, especially before any other party.
Right To Reimbursement
The legal right of a party to be compensated for expenses they have incurred on behalf of another party.
Investor
A person or entity that allocates capital with the expectation of receiving financial returns.
- Acquire knowledge on the outcomes of bearing primary or secondary liability in negotiable instruments.
- Understand the rights and defenses available against claims on negotiable instruments.
Verified Answer
CO
Chris OrtizMay 30, 2024
Final Answer :
False
Explanation :
The investor, acting as a guarantor or surety by signing the note, has the right to seek reimbursement from the primary obligor (the business) if they end up paying on the business's behalf.
Learning Objectives
- Acquire knowledge on the outcomes of bearing primary or secondary liability in negotiable instruments.
- Understand the rights and defenses available against claims on negotiable instruments.
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