Asked by Margaret Galeener on Jul 06, 2024
Verified
A delay in payment or a refusal to pay an instrument when it is returned because it lacks a proper indorsement is a dishonor of the instrument.
Proper Indorsement
A legally acceptable signature or annotation on a document, such as a check, that authorizes its transfer or acceptance.
Dishonor
The refusal or inability to pay a debt when due, or the failure of a financial instrument, like a check, to be accepted or paid on presentation.
Refusal
The act of declining or rejecting an offer, request, or command.
- Grasp the conditions under which a delay in payment or refusal to pay constitutes dishonor of an instrument.
Verified Answer
PP
Prince PandeyJul 11, 2024
Final Answer :
False
Explanation :
A dishonor of an instrument occurs when it is presented for payment and payment is refused or cannot be obtained, not because it lacks a proper indorsement. Lack of a proper indorsement might prevent the instrument from being negotiated further, but it is not a reason for dishonor related to payment.
Learning Objectives
- Grasp the conditions under which a delay in payment or refusal to pay constitutes dishonor of an instrument.