Mark gives a bearer note for $50 to Joe in exchange for an excellent dinner at Joe's restaurant. Joe delivers the note to Sue for $50 and Sue takes it to Mark to be paid. If Mark says the note was originally written for only $5, what can Sue do?
A) Hold Joe liable for breach of warranty.
B) Get $50 from Mark.
C) Hold Joe liable for breach of contract.
D) Only get $5 from Mark.

Question

Quizplus · Accepted Answer

Sue can hold Joe liable for breach of warranty because Joe transferred the note to Sue, implying that it was valid and enforceable for the amount stated. If the note was altered or misrepresented, Joe is responsible for the discrepancy.

Mark Gives a Bearer Note for $50 to Joe in Exchange