Asked by Nazmi Olcar on Jun 29, 2024
Verified
Jerry Hall makes out a note for $100 in such a way that someone could alter it to read $10,000.Someone alters the note and negotiates it to Pete Mason,who can qualify as a holder in due course.Which of the following statements is true?
A) Jerry shall share the loss with the bank where she holds an account.
B) Jerry does not have to pay Pete who currently possesses the note.
C) Pete can collect $10,000 from the person who "raised" the note.
D) Pete can collect $10,000 from Jerry.
Alters
In legal or general context, to change or modify something, such as a document, condition, or situation.
Holder In Due Course
A legal term for an individual or entity that has acquired a negotiable instrument in good faith and for value, and therefore has certain rights above the original payee.
Negotiates
The process by which parties come together to try and reach an agreement on a matter, often involving discussion and compromise.
- Comprehend the consequences of modifying or falsifying negotiable instruments and the safeguards provided to bona fide holders.
Verified Answer
ZK
Zybrea KnightJul 03, 2024
Final Answer :
D
Explanation :
If a person has been negligent,Article 3 of the UCC precludes her from using the alteration or lack of authorization as a reason for not paying a person that in good faith pays the instrument or takes it for value.
Learning Objectives
- Comprehend the consequences of modifying or falsifying negotiable instruments and the safeguards provided to bona fide holders.