Asked by Schyler Molloy on Apr 24, 2024
Verified
Shawn was an indorser on a check.A subsequent holder presented the check to the bank named on the instrument and was informed that there was not enough money in the account to honor the check.The next day,the subsequent holder demanded the money from Shawn.Must Shawn pay the subsequent holder of the instrument? Why or why not?
Indorser
An alternative spelling of "endorser," referring to a person who signs a document (often a negotiable instrument) to endorse it, thereby assuming responsibility under certain conditions.
Subsequent Holder
An individual or entity that lawfully receives possession or control of a negotiable instrument, such as a check or promissory note, after it has been issued.
Honor
A principle that drives individual conduct to embody integrity, respect, and ethical behavior.
- Understand the repercussions of counterfeiting and responsibility in payment tools.
Verified Answer
SH
Salma Hossain6 days ago
Final Answer :
Unless an indorsement states otherwise,every indorser agrees to pay any subsequent holder the face amount of the instrument if it is dishonored.Since the holder notified Shawn of the check's dishonoring,he is liable to pay the holder the face amount of the instrument.
Learning Objectives
- Understand the repercussions of counterfeiting and responsibility in payment tools.