Asked by NOYAN ALI.K on Jul 04, 2024
Verified
Quint brings a draft drawn on Regional Credit Union and "payable to Silo LLC" to Regional. The credit union stamps "accepted" on the face of the draft, signs it, and dates it. Regional is
A) no longer liable for payment of the draft.
B) secondarily liable for payment of the draft.
C) obligated to pay the draft when it is presented for payment.
D) liable for payment of the draft thirty days after issue.
Accepted Draft
An agreement or negotiable instrument that has been formally acknowledged by the addressee, promising to pay the specified amount by a certain date.
Obligated
Being legally or morally required to do something based on laws, regulations, agreements, or ethical principles.
- Evaluate the liabilities of participants involved in the initiation, transmission, and dishonor of negotiable instruments.
Verified Answer
ZK
Zybrea KnightJul 05, 2024
Final Answer :
C
Explanation :
When a bank or credit union stamps "accepted" on a draft and signs it, this constitutes an agreement to pay the draft when it is presented for payment, making the institution primarily liable.
Learning Objectives
- Evaluate the liabilities of participants involved in the initiation, transmission, and dishonor of negotiable instruments.