Which of the following is true of warranty liability as it affects negotiable instruments?
A)Warranty liability applies to any persons who transfer an instrument and receive consideration.
B)A drawee of an unaccepted draft who pays in good faith receives a presentment warranty from the person obtaining payment and from all prior transferors of the draft.
C)A drawee who accepts an instrument in good faith receives a presentment warranty from the person obtaining acceptance that the draft has not been altered.
D)All of the above.
E)None of the above.

Question

Quizplus · Accepted Answer

Choice A is true as warranty liability applies to any person who transfers the instrument and receives consideration. 
Choice B is also true as a drawee who pays an unaccepted draft in good faith receives a presentment warranty from the person obtaining payment and from all prior transferors of the draft. 
Choice C is also true as a drawee who accepts an instrument in good faith receives a presentment warranty from the person obtaining acceptance that the draft has not been altered. Therefore, option D is correct as all the above choices are true.

Which of the Following Is True of Warranty Liability as It