Read the following statements with regard to the parties involved with negotiable instruments and indicate which is false.
A) The person who signs and issues the cheque is the drawer. The person who is owed the money and receives the cheque is the drawee.
B) A person who signs a draft is a drawer; the party commanded to pay is the drawee.
C) An acceptor of a draft will become liable to the payee for the amount of the draft.
D) The payee of a negotiable instrument can negotiate the instrument to a holder who will be remote in relation to the drawer.
E) The person who signs a promissory note is the maker of the note and, unlike a cheque, the note will not include a drawee.

Question

Quizplus · Accepted Answer

The false statement is that the drawee is the one who is owed the money and receives the cheque. In fact, the drawee is the bank on which the cheque is drawn, not the person who receives the cheque. The person who receives the cheque is the payee.

Read the Following Statements with Regard to the Parties Involved