Asked by Clayton Kinzel on Jun 15, 2024
Verified
Assuming there is proper presentment and notice of dishonor, can Bernard be held liable on the promissory note?
A) Yes, and he can sue Dexter who is primarily liable for the note.
B) Yes, but he has no recourse against Dexter.
C) No, only Dexter can be held liable.
D) No, because he is not primarily liable.
E) Garren has no recourse since he is not a holder in due course.
Notice of Dishonor
A formal notification indicating that a negotiable instrument, such as a check or bill of exchange, has been presented for payment and refused.
- Learn the details concerning liability for endorsers and the pecking order of liability between endorsers and writers of promissory notes.
Verified Answer
NT
Nadeem TariqJun 19, 2024
Final Answer :
A
Explanation :
Bernard can be held liable on the promissory note because, by endorsing the note and delivering it to Garren, he essentially guaranteed payment. As an endorser, Bernard can be held secondarily liable if Dexter, the primary obligor, fails to pay. Bernard can then pursue Dexter for reimbursement, as Dexter is primarily liable for the note.
Learning Objectives
- Learn the details concerning liability for endorsers and the pecking order of liability between endorsers and writers of promissory notes.