If a party tenders payment on an instrument and the tender is refused, which parties are discharged from liability?
Explanation
This question covers the legal effect of a refused tender of payment. This act discharges parties who have secondary liability (indorsers and accommodation parties) because the holder's refusal to accept payment impairs their rights.
Other questions
Who is considered primarily liable on a negotiable instrument, meaning they are absolutely required to pay unless they have a valid defense?
What are the three events that must occur for a party with secondary liability, such as a drawer or an indorser, to become liable on an instrument?
If an authorized agent signs a check that is preprinted with the principal's name but the agent signs only their own name without indicating their agency status, what is the agent's personal liability on the check?
What is the general rule regarding the liability for an unauthorized signature, such as a forgery, on a negotiable instrument?
Under the UCC's imposter rule, if a maker is induced by an imposter to issue an instrument in the name of the impersonated payee, what is the legal effect of the imposter's indorsement?
What is the key difference between transfer warranties and presentment warranties?
To whom do the transfer warranties of a person who, for consideration, transfers a bearer instrument without indorsement extend?
What is the difference between a universal (real) defense and a personal defense in the context of negotiable instruments?
Which of the following is considered a universal (real) defense, valid even against a holder in due course (HDC)?
If a holder in due course (HDC) acquires a note that has been materially altered, what amount can the HDC enforce against the maker or drawer?
What is the purpose of FTC Rule 433, which requires a specific notice to be included in consumer credit contracts?
How can a party to a negotiable instrument be discharged from liability by cancellation or surrender?
An accommodation party who signs on behalf of the maker of a note is known as an accommodation maker. What is this party's liability on the instrument?
According to the fictitious payee rule, if a dishonest employee of Goldstar Aviation has general authority to issue company checks and issues a check to Del Rey Company with no intent for Del Rey to receive payment, who bears the loss when the employee forges the indorsement and cashes the check?
For a domestic, uncertified check, what is the presumptively reasonable time period for presentment to hold the drawer secondarily liable?
What is the primary liability of a maker of a promissory note?
If a holder's negligence substantially contributes to the forgery of a drawer's signature, what is the consequence?
Which of the five transfer warranties states that the transferor has no knowledge of any bankruptcy proceedings against the maker, acceptor, or drawer of the instrument?
Which of the following situations would be considered fraud in the inducement, a personal defense?
If a holder impairs the value of collateral securing an instrument without the consent of a co-maker, what is the effect on the co-maker's liability?
Which of the following is NOT one of the five transfer warranties made by a person who transfers an instrument for consideration?
If a person presents an instrument for payment, which of the following is NOT one of the presentment warranties they make to the person who pays in good faith?
When an agent signs a promissory note 'Sandra Binney, agent' but fails to name the principal, what is the agent's liability?
If a bank pays on a check with a forged drawer's signature, and the customer's negligence substantially contributed to the forgery, what is the bank's liability?
What type of liability does a qualified indorser (one who signs 'without recourse') have on a negotiable instrument?
Which of the following defenses is a personal defense, ineffective against a holder in due course?
If a holder discharges an indorser's liability by canceling their signature, what is the effect on subsequent indorsers?
An agent for Bob Aronson signs a promissory note as 'Sandra Binney, Bob Aronson'. Who is liable on this instrument?
For timely notice of dishonor to be given to secondary parties, a bank must give notice before its midnight deadline. What is the timeframe for a party that is not a bank?
If a person reacquires an instrument they held previously, what is the effect on intervening indorsers?
In the case of Keesling v. T.E.K. Partners, LLC, the court found that the second note constituted a material alteration of the original note. Which of the following was NOT a reason for this finding?
Who is liable when an unauthorized agent signs a negotiable instrument on behalf of a principal without authority?
What is the key difference in liability between an accommodation maker and an accommodation indorser?
Under what circumstance does an agent's implied warranty of authority arise?
In the case of Wachovia Bank, N.A. v. Foster Bancshares, Inc., the dispute centered on whether a fraudulent check was a forgery or an alteration. Why was this distinction critical?
Which of the following is NOT considered a personal defense that is ineffective against a holder in due course?
What is the time limit for giving notice of a claim for breach of a presentment warranty?
When is an agent personally liable if they sign an instrument that names the principal but does not indicate the agent's representative capacity (e.g., 'Bob Aronson, Sandra Binney')?
What is the key element that distinguishes the imposter rule from the fictitious payee rule?
What is an acceptor's liability on a draft?
What is the time limit for an ordinary check to be presented for payment to hold an INDORSER secondarily liable?
Which of the following acts does NOT constitute dishonor of an instrument?
A person can be discharged from liability on an instrument by payment. In which situation would a party NOT be discharged by payment?
An ordinary holder acquires a note from a payee who breached the underlying contract with the maker. Which statement is true regarding the maker's defense?
What is the liability of an authorized agent who signs a check 'Aronson, by Binney, agent'?
Discharge in bankruptcy is what type of defense?
When a bank certifies a check, what happens to the liability of the drawer and any prior indorsers?
How many of the five transfer warranties are made by a person who transfers a negotiable instrument for consideration?
If a holder agrees to extend the time of payment for the maker of a note, what effect might this have on an indorser of that note?