Asked by Jeremy Quinonez on May 20, 2024
Verified
In the event of a breach of a presentment warranty:
A) the drawee is entitled to compensation for expenses and loss of interest resulting from the breach to compensate for the amount paid by the drawee.
B) the drawee's right to recover damages for breach of warranty is annulled by any failure on the part of the drawee to exercise ordinary care in making payment.
C) the warrantor may defend by showing that the indorsement is effective under the impostor or fictitious payee rules.
D) the drawee can withdraw an amount equal to the amount paid by the drawee less the amount the drawee received or is entitled to receive from the drawer.
Breach
The violation or infringement of a law, obligation, contract, or trust.
Ordinary Care
The degree of care that a reasonably prudent person would exercise under similar circumstances to avoid harm to themselves or property.
Impostor
An individual who deceitfully pretends to be someone else in order to gain a benefit or deceive others.
- Acquire knowledge on the repercussions of breaching warranties and their association with liabilities and reimbursements.
Verified Answer
EM
Enmanuel MorilloMay 26, 2024
Final Answer :
D
Explanation :
A drawee who makes payment may recover as damages for any breach of a presentment warranty an amount equal to the amount paid by the drawee less the amount the drawee received or is entitled to receive from the drawer because of the payment.
Learning Objectives
- Acquire knowledge on the repercussions of breaching warranties and their association with liabilities and reimbursements.