Asked by mykeria adkins on Jul 20, 2024
Verified
Jack received a check as payment for the work he did.He indorsed the check "without recourse." What legal effect does this have?
A) The drawer of the check is discharged from primary liability on the check.
B) Jack is discharged from secondary liability on the check.
C) The drawer of the check is discharged from secondary liability on the check.
D) Jack is discharged from primary liability on the check.
Without Recourse
A term indicating that the seller or transferor of a financial instrument is not liable to the buyer or transferee in case of default.
Discharged
Refers to the completion or termination of a legal obligation or debt.
Primary Liability
The direct responsibility to pay a debt or fulfill an obligation, without relying on another to first default.
- Understand the impact of endorsements and warranties on negotiable instruments.
- Ascertain the scenarios leading to a party's exoneration from obligations on a negotiable instrument.
Verified Answer
SS
Sydnee SmithJul 22, 2024
Final Answer :
B
Explanation :
The indorser can avoid secondary liability only by qualifying his indorsement,such as "without recourse," on the instrument when he indorses it.
Learning Objectives
- Understand the impact of endorsements and warranties on negotiable instruments.
- Ascertain the scenarios leading to a party's exoneration from obligations on a negotiable instrument.