Asked by eisha tayyab on Jul 21, 2024
Verified
Mike signs a note payable to a bank.The bank indorses and negotiates the note to Fay,who then indorses and negotiates it to Sam.Sam presents the note to Mike,who dishonors it.Then Sam decides to pursue Fay and the bank on their secondary indorsers' liability.Against whom can Sam proceed?
A) Fay
B) The bank
C) Both Fay and the bank
D) Neither Fay nor the bank
Negotiates
The process of discussing something formally to reach an agreement or compromise.
Secondary Indorsers' Liability
Refers to the legal responsibility that falls on endorsers who sign a document or contract after the primary signer, particularly in financial transactions.
Pays
Refers to the act of giving money in exchange for goods, services, or to fulfill an obligation.
- Understand the roles and liabilities of parties involved in negotiable instruments, including drawer, drawee, and indorser.
- Comprehend the fundamental distinctions between primary and secondary liability in negotiable instruments.
Verified Answer
MR
Mikerland ReilivJul 27, 2024
Final Answer :
C
Explanation :
A person who is secondarily liable is like a guarantor on a contract;Article 3 requires a secondary party to pay the negotiable instrument only if a person who is primarily liable defaults on that obligation.
Learning Objectives
- Understand the roles and liabilities of parties involved in negotiable instruments, including drawer, drawee, and indorser.
- Comprehend the fundamental distinctions between primary and secondary liability in negotiable instruments.