Asked by ornela xhina on May 29, 2024

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On the back of a check payable to Lo, she writes "Pay to Mei, without recourse" and signs it. This

A) does not effect the check's negotiability or any party's liability.
B) relieves Lo of liability on the check.
C) relieves Mei of liability on the check.
D) renders the check nonnegotiable.

Without Recourse

This refers to a provision in an agreement that exempts the seller from liability or obligation to the buyer in case of some failure on the part of the products or services sold.

Negotiability

Refers to the feature of a financial instrument which allows it to be transferred from one party to another in a legal manner, typically without endorsement or delivery.

  • Pinpoint the determinants impacting the liability of a party on a negotiable instrument.
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Verified Answer

AF
Abigail FloresJun 02, 2024
Final Answer :
B
Explanation :
The phrase "without recourse" when used by an endorser on a negotiable instrument, such as a check, indicates that the endorser does not wish to assume liability for the instrument. In this case, by writing "Pay to Mei, without recourse" and signing it, Lo is indicating that she does not want to be liable if the check is not honored. This does not affect the negotiability of the check or Mei's liability.