Which of the following statements is true of primary liability on a check when it is issued?
A) The payee is primarily liable on it.
B) The drawer is primarily liable on it.
C) The drawee bank is primarily liable on it.
D) No party is primarily liable on it.

Question

Quizplus · Accepted Answer

At the time a check or other draft issues, no party is primarily liable on it. Usually, the drawee bank pays a check when it is presented for payment and no person becomes primarily liable. However, the drawer or a holder of the check may ask the drawee bank to accept or certify the check. If the drawee bank certifies the check, it becomes primarily or absolutely liable for paying the check as it reads at the time of its acceptance.

Which of the Following Statements Is True of Primary Liability