Which of the following is true of a qualified indorsement?
A) An instrument containing a qualified indorsement can only be negotiated once.
B) An indorsement once qualified will protect all subsequent indorsers.
C) A qualified indorsement protects only the indorser who wrote the indorsement.
D) A qualified indorsement obligates the indorser to pay in case the maker defaults.

Question

Quizplus · Accepted Answer

A qualified indorsement only protects the indorser who wrote the indorsement. It limits the liability of the indorser by specifying a certain condition or purpose for which the instrument can be negotiated. It does not affect the negotiability or ability of subsequent indorsers to negotiate the instrument further. It also does not obligate the indorser to pay in case the maker defaults.

Which of the Following Is True of a Qualified Indorsement