Which of the following statements is true of contractual liability on negotiable instruments?
A) It can arise even when a person has not signed the negotiable instrument.
B) It cannot arise when a person has authorized someone else to sign the negotiable instrument.
C) It can arise from negligence relating to the issuance.
D) It cannot arise from improper payment.

Question

Quizplus · Accepted Answer

Liability on a negotiable instrument can arise from the fact that a person has signed a negotiable instrument or has authorized someone else to sign it. The liability depends on the capacity in which the person signs the instrument. Liability also arises from (1) transfer or presentment of an instrument, (2) negligence relating to the issuance, alteration, or indorsement of the instrument, (3) improper payment, or (4) conversion.

Which of the Following Statements Is True of Contractual Liability