Asked by Syecia Johnson on May 06, 2024
Verified
Which of the following is true under the Uniform Commercial Code regarding the liability of a principal to an agent if the agent enters into a contract that is a negotiable instrument?
A) The principal is liable to the same extent as if no negotiable instrument were involved because the negotiable instrument has no effect on the principal's liability.
B) The principal cannot be held liable unless the principal's name is on the instrument.
C) The principal cannot be held liable unless the agent's signature indicates that it was made in a representative capacity.
D) 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 representative capacity.
E) The principal cannot be held liable unless the principal's name is on the instrument,the agent's signature indicates that it was made in a representative capacity,or the agent has been adjudicated insolvent.
Negotiable Instrument
A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.
Uniform Commercial Code
A comprehensive set of laws governing all commercial transactions in the United States, aiming to standardize and provide a legal framework for businesses and individuals engaging in commerce.
- Investigate the fundamentals of liability, encompassing tort and contractual liability, in the framework of agency associations.
Verified Answer
BT
Bella TaharMay 09, 2024
Final Answer :
D
Explanation :
The Uniform Commercial Code (UCC)governs negotiable instruments and states that a principal cannot be liable for a negotiable instrument if his or her name is not on the instrument or if the agent's signature does not indicate that the agreement was made in a representative capacity.
Learning Objectives
- Investigate the fundamentals of liability, encompassing tort and contractual liability, in the framework of agency associations.