When the transfer of an instrument breaches a ________ associated with the instrument, warranty liability results.

A) clause
B) warranty
C) time limit
D) primary liability
E) secondary liability

Warranty Liability

Liability that is attributed when the transfer of an instrument breaches a warranty associated with an instrument.

Transfer

The act of moving or conveying property or rights from one party to another.

Primary Liability

The obligation falls directly on the individual or entity primarily responsible for an obligation, especially in financial transactions.