Colin signs a note "payable to the order of Debit Bank." The bank indorses the note in blank and negotiates it to Equity Funds, which sells it to Financial Investments. Liability associated with the transfer of the note from Equity to Financial is
A) none of the choices.
B) contractual.
C) signature.
D) warranty.

Question

Quizplus · Accepted Answer

When Equity Funds sells the note to Financial Investments, they provide certain implied warranties regarding the note, such as its authenticity and that they have the right to transfer it. This is known as warranty liability.

Colin Signs a Note "Payable to the Order of Debit