Employment Company draws a check payable to Felix. Felix indorses the back and negotiates the check to Guaranty Bank. Primarily liable on the check is
A) Employment Company.
B) Felix.
C) Guaranty Bank.
D) none of the choices.

Question

Quizplus · Accepted Answer

Primarily liable on a check is the party that created it, which is the drawer. However, in this context, Employment Company is the drawer, but they are not primarily liable once the check is negotiated. The bank is not primarily liable either, as it is a holder in due course. Felix, as an endorser, is secondarily liable. Therefore, none of the choices are primarily liable.

Employment Company Draws a Check Payable to Felix