Under the UCC, if an agent enters into a contract that is an negotiable instrument, the principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in ________.

A) a representative capacity.
B) the presence of a notary.
C) the presence of the disclosed or undisclosed principal.
D) a bank or an institution that would accept the negotiable instrument.
E) connection with an auxiliary promise to the contract.

Question

Sharon Bussey · Accepted Answer

Final Answer : A, Explanation :  Under the Uniform Commercial Code (UCC), for a principal to be held liable on a negotiable instrument, the instrument must either bear the principal's name or the agent's signature must clearly indicate that the agent was signing in a representative capacity. This ensures that the responsibility can be correctly attributed to the principal.

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