Asked by Courtney Morris on May 10, 2024
Verified
Which of the following must occur for a drawer to become liable on an instrument?
A) The holder of the instrument must present the instrument in a proper and timely fashion.
B) The instrument must be dishonored.
C) Notice of the dishonor must be given to the drawer.
D) The holder of the instrument must present the instrument in a proper and timely fashion,the instrument must be dishonored,and notice of the dishonor must be given to the drawer.
E) The holder of the instrument must present the instrument in a proper and timely fashion and the instrument must be dishonored,but no notice of dishonor is required because the party adversely affected by the dishonor may proceed directly to court.
Dishonored
Refers to the refusal or inability to pay a financial obligation when due, such as a bounced check or a default on a payment.
- Becoming familiar with the accountability of parties engaged in transactions involving negotiable instruments.
Verified Answer
MM
Mirti Mariya ArulthasanMay 15, 2024
Final Answer :
D
Explanation :
Three conditions must be met for a drawer or endorser to become liable on an instrument.First,the holder of the instrument must present the instrument in a proper and timely fashion.Second,the instrument must be dishonored.Third,notice of the dishonor must be given to the drawer.
Learning Objectives
- Becoming familiar with the accountability of parties engaged in transactions involving negotiable instruments.