True/False
Indicate whether the
statement is true or false.
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1.
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Every person who signs a negotiable instrument is liable for payment of that
instrument when it comes due.
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2.
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If an instrument is incomplete when the maker signs it, the maker's
obligation is to pay it to an HDC according to the incomplete terms.
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3.
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An acceptor is secondarily liable to all subsequent holders of an
instrument.
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4.
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A drawer is primarily liable on an instrument.
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5.
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Dishonor occurs when proper presentment of an instrument is excused and its
payment is refused.
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6.
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The dishonor of an instrument relieves secondary parties of liability.
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7.
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An authorized agent may be personally liable on an instrument if the agent does
not sign his or her own name.
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8.
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An unauthorized signature never binds the person whose name is forged.
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9.
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A drawer is not liable on a check made out to an imposter.
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10.
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Under the UCC, a fictitious payee's indorsement is treated as a
forgery.
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11.
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When an instrument has a forged indorsement, the loss usually falls on the first
party to take the instrument.
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12.
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Transfer warranties attempt to impose liability on the wrongdoer or the party
who dealt most immediately with the wrongdoer.
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13.
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Presentment warranties protect the person who presents an instrument for
payment.
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14.
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Universal defenses defeat the claims of HDCs.
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15.
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The completion of an originally incomplete instrument in an unauthorized manner
is a defense against payment on the instrument to an HDC.
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16.
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If a court has declared a person to be mentally incompetent, then any instrument
issued by that person is void.
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17.
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A breach of a contract for which an instrument was issued will defeat the claim
of an ordinary holder for payment on the instrument.
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18.
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A lack or failure of consideration is no defense to payment of a negotiable
instrument to any holder.
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19.
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When a party that is primarily liable on an instrument pays to a holder
the amount due in full, all parties to the instrument are discharged.
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20.
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If the holder of an instrument strikes out the names of several of the
indorsers, any liability those parties had on the instrument is canceled.
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