Asked by Jasleen Sekhon on May 16, 2024
Verified
Which of the following is true in the event an instrument contains more than one endorsement?
A) Each endorser is liable for the full amount to the subsequent endorser or to the holder.
B) Only the last endorser is liable to the holder and no prior endorsers are liable to a subsequent endorser.
C) Each endorser is liable for the full amount to the subsequent endorser, but only the last endorser is liable to any holder.
D) The last endorser is liable to the holder, whereas subsequent endorsers are not liable to the holder, but are responsible for reimbursing the last endorser in proportion to the number of endorsers that exist.
E) Each endorser is liable to the holder in proportion to the number of endorsers that exist.
Multiple Endorsements
Refers to the practice in banking and finance where a document, such as a check, is signed over to another party multiple times.
Liable
Being legally responsible for something, typically referring to obligations in law.
- Attain knowledge about the various positions and their corresponding liabilities in the context of negotiable instruments, including the maker, drawer, acceptor, and endorser.
Verified Answer
KA
Krystle ArcherMay 17, 2024
Final Answer :
A
Explanation :
Each endorser is liable for the full amount to the subsequent endorser or to the holder, meaning that if the instrument is dishonored, each endorser guarantees payment to the person they endorsed it to or to the current holder.
Learning Objectives
- Attain knowledge about the various positions and their corresponding liabilities in the context of negotiable instruments, including the maker, drawer, acceptor, and endorser.