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test 3 Flashcards

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1
Q

TRUE/FALSE CH 29

  1. An instrument may be transferred by negotiation or by assignment.
A

True

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2
Q

TRUE/FALSE Ch 29

  1. When a negotiable instrument is transferred by negotiation, the transferee is recognized as the holder of the paper.
A

True

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3
Q

TRUE/FALSE Ch 29

  1. A holder of the paper has immunity from certain defenses that might have been asserted against the transferor.
A

False

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4
Q

TRUE/FALSE Ch 29

  1. A holder is also known as an assignee of the paper
A

False

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5
Q

TRUE/FALSE CH 29

  1. An instrument that originally was bearer paper always remains bearer paper.
A

False

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6
Q

TRUE/FALSE Ch 29

  1. The order or bearer character of a paper is determined as of the time when the negotiation is about to take place.
A

True

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7
Q

TRUE/FALSE Ch 29

  1. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.
A

True

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8
Q

TRUE/FALSE Ch 29

  1. Bearer paper may only be negotiated by the actual transfer of possession of the instrument.
A

False

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9
Q

TRUE/FALSE Ch 29

  1. Order paper is negotiated by the indorsement of the holder and delivery.
A

True

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10
Q

TRUE/FALSE Ch 29

  1. Indorsements may be classified in terms of whether the indorser has added any words to the indorsement and what those words are.
A

True

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11
Q

TRUE/FALSE Ch 29

  1. A blank indorsement indicates the person to whom the instrument is to be paid-that is, the transferee.
A

False

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12
Q

TRUE/FALSE Ch 29

  1. A person who acquires the instrument on which the last indorsement is blank becomes the holder.
A

True

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13
Q

TRUE/FALSE Ch 29

  1. Order paper is converted into bearer paper by the holder’s blank indorsement.
A

True

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14
Q

TRUE/FALSE Ch 29

  1. When a special indorsement is made, the instrument continues to be order paper and may be negotiated only by an indorsement and delivery.
A

True

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15
Q

TRUE/FALSE Ch 29

  1. A special indorsement consists of the signature of the indorser and the words identifying the person to whom the indorser makes the instrument payable.
A

True

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16
Q

TRUE/FALSE Ch 29

  1. An indorsement “Pay to Donald Hames, Cathy Dukes” is not a valid indorsement because it does not contain the words “order” or “bearer.”
A

False

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17
Q

TRUE/FALSE Ch 29

  1. A qualified indorsement qualifies the effect of a blank or special indorsement by disclaiming certain liabilities of the indorser to a maker or drawee.
A

True

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18
Q

TRUE/FALSE Ch 29

  1. A restrictive indorsement specifies the purpose of the indorsement or the use to be made of the paper.
A

True

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19
Q

TRUE/FALSE Ch 29

19.	If an instrument bears a restrictive indorsement, any further transfer or negotiation is effectively barred.
A

False

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20
Q

TRUE/FALSE Ch 29

20.	A payee or indorsee whose name is misspelled may indorse the wrong name, the correct name, or both.
A

True

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21
Q

TRUE/FALSE Ch 29

  1. The transfer and collection of negotiable instruments between banks requires specific indorsements.
A

False

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22
Q

TRUE/FALSE Ch 29

  1. If an instrument is payable to alternative payees or if it has been negotiated to alternative indorsees, it may be indorsed and delivered by either of them.
A

True

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23
Q

TRUE/FALSE Ch 29

  1. If an instrument is drawn in favor of an officer of a named corporation, the instrument is payable to the corporation, the officer, or any successor to such officer.
A

True

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24
Q

TRUE/FALSE Ch 29

  1. Under the UCC, a negotiation is not effective when it is made by a minor or any other person lacking capacity.
A

False

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25
Q

TRUE/FALSE Ch 29

  1. It is worse for the holder to lose order paper than to lose bearer paper.
A

False

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26
Q

TRUE/FALSE Ch 29

  1. If a lost negotiable instrument is in bearer form at the time of the loss, the finder is entitled to enforce payment.
A

True

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27
Q

TRUE/FALSE Ch 29

  1. The warranties made by an unqualified indorser guarantee that payment of the instrument will be made.
A

False

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28
Q

TRUE/FALSE Ch 29

  1. Thomas, the holder of a check, presents it to the drawee bank for payment. If Thomas indorses the check, Thomas warrants that the account of the drawer in the drawee bank contains funds sufficient to cover the check.
A

False

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29
Q

TRUE/FALSE Ch 29

  1. To enforce an implied warranty of an indorser, the party claiming under the warranty must give the indorser notice of the breach within fourteen (14) days after the claimant learns or has reason to know of the breach and the identity of the indorser.
A

False

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30
Q

TRUE/FALSE Ch 29

  1. The warranty liability of a qualified indorser is the same as that of an unqualified indorser.
A

True

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31
Q

MULTIPLE CHOICE CH 29

  1. The transferee has only those rights that were possessed by the transferor of the note when a transfer of an instrument is made by:

a. an assignment.
b. a negotiation.
c. a sale.
d. a will.

A

A. an assignment

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32
Q

MULTIPLE CHOICE CH 29

2.	The transferring of an instrument in such a way as to make the transferee the holder of the paper is termed:

a. an assignment.
b. a conversion.
c. a sale.
d. a negotiation.

A

D. a negotiation

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33
Q

MULTIPLE CHOICE CH 29

  1. The order or bearer character of the paper determines how it may be:

a. assigned.
b. sold.
c. negotiated.
d. all of the above.

A

C. negotiated

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34
Q

MULTIPLE CHOICE CH 29

  1. Negotiation of bearer paper requires:

a. delivery only.
b. indorsement only.
c. both indorsement and delivery.
d. neither indorsement nor delivery.

A

A. delivery only

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35
Q

MULTIPLE CHOICE CH 29

  1. Negotiation of order paper requires:

a. delivery only.
b. indorsement only.
c. both indorsement and delivery.
d. neither indorsement nor delivery.

A

C. both indorsement and delivery

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36
Q

MULTIPLE CHOICE CH 29

  1. A blank indorsement turns a(n) __________instrument into a(n) __________ instrument.

a. negotiable; non-negotiable
b. non-negotiable; negotiable
c. bearer; order
d. order; bearer

A

D. order; bearer

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37
Q

MULTIPLE CHOICE CH 29

7.	When the indorser merely signs a negotiable instrument, the indorsement is called a \_\_\_\_\_\_\_\_\_\_ indorsement.

a. special
b. qualified
c. blank
d. restrictive

A

C. blank

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38
Q

MULTIPLE CHOICE CH 29

  1. A __________ indorsement consists of the signature of the indorser and words specifying the person to whom the indorser makes the instrument payable.

a. qualified
b. restrictive
c. special
d. blank

A

C. special

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39
Q

MULTIPLE CHOICE CH 29

  1. A qualified indorsement is given by using the phrase __________.

a. “as is”
b. “without recourse”
c. “with all faults”
d. “buyer beware”

A

B. “without recourse”

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40
Q

MULTIPLE CHOICE CH 29

  1. An indorsement “for deposit only” is:

a. restrictive.
b. qualified.
c. special.
d. blank.

A

A. restrictive

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41
Q

MULTIPLE CHOICE CH 29

  1. When the name of the payee is spelled incorrectly, the payee:

a. must indorse the instrument with the incorrect spelling of the payee’s name.
b. must indorse the instrument with the correct spelling of the payee’s name .
c. may indorse the instrument with either the correct or incorrect spelling of the payee’s name.
d. may not indorse the instrument.

A

C. may indorse the instrument with either the correct or incorrect spelling of the payees name.

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42
Q

MULTIPLE CHOICE CH 29

  1. When parties intend to negotiate an order instrument but the holder fails to indorse it:

a. there is no negotiation.
b. the transfer has the effect of a contract assignment .
c. the transferee has the right to require the transferor’s indorsement if consideration was given.
d. all of the above.

A

D. all of the above

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43
Q

MULTIPLE CHOICE CH 29

  1. A forged or unauthorized indorsement is by definition:

a. an indorsement of the person by whom it appears to have been made.
b. no indorsement of the person by whom it appears to have been made.
c. binding on the party who refuses to ratify the instrument.
d. incapable of being ratified.

A

B. no indorsement of the person by whom it appears to have been made.

44
Q

MULTIPLE CHOICE CH 29

  1. Clark is the senior payroll clerk for Gonzalez Corporation. When preparing the weekly payroll, Clark added the name of Simmons, a fictitious employee, to the payroll list. Lewis, the treasurer of the corporation, signed the payroll checks and delivered them to Clark. Clark distributed checks to the correct employees and kept the one made payable to the order of Simmons. Clark indorsed the name of Simmons to the check, cashed it at Diamond Check Cashing. In this situation:

a. an indorsement was not necessary to negotiate the instrument.
b. the Gonzalez Corporation can seek recovery against Diamond Check Cashing.
c. the forged signature is given the same effect as though it had been authorized by the named payee.
d. Clark is not subject to civil or criminal liability.

A

C. the forged signature is given the same effect as though it had been authorized by the named payee.

45
Q

MULTIPLE CHOICE CH 29

  1. The situation in which an individual impersonates the holder of a savings account and, by presenting a forged withdrawal slip to the savings bank, receives from the bank a check payable to the bank’s customer, is covered by the:

a. impostor rule.
b. negotiation rule.
c. assignment rule.
d. bank rule.

A

A. impostor rule

46
Q

MULTIPLE CHOICE CH 29

  1. In the case of a check, when the impostor rule applies:

a. the drawer of the check can successfully raise the defense of the forged indorsement.
b. the forged indorsement is effective to negotiate the instrument.
c. the forged indorsement is ineffective to negotiate the instrument.
d. the instrument becomes nonnegotiable.

A

B. the forged indorsement is effective to negotiate the instrument

47
Q

MULTIPLE CHOICE CH 29

  1. A transferor may be able to set aside a negotiation obtained by fraud or duress unless:

a. a minor is involved.
b. the negotiation was part of an illegal transaction.
c. the negotiation was beyond the powers of the corporation.
d. the instrument has been acquired in the meantime by a holder in due course who did not know of the misconduct.

A

D. the instrument has been acquired in the meantime by a holder in due course who did not know of the misconduct

48
Q

MULTIPLE CHOICE CH 29

  1. If a lost instrument is order paper, the finder __________.

a. becomes the assignee of the instrument.
b. becomes the owner of the instrument.
c. becomes the holder of the instrument.
d. does not become the holder of the instrument.

A

D. does not become the holder of the instrument

49
Q

MULTIPLE CHOICE CH 29

  1. An unqualified indorser who receives consideration for the indorsement impliedly warrants that:

a. the warrantor is a person entitled to enforce the instrument.
b. all signatures on the instrument are authentic and authorized.
c. the instrument has not been altered.
d. all of the above.

A

D. all of the above

50
Q

MULTIPLE CHOICE CH 29

  1. The implied warranties of an unqualified indorser do not include a guarantee that:

a. payment of the instrument will be made.
b. the account of the drawer in the drawee bank contains funds sufficient to cover the check.
c. both a. and b.
d. neither a. nor b.

A

C. both a. and b.

51
Q

MULTIPLE CHOICE CH 29

  1. If a negotiable order instrument is transferred to another party without an indorsement, the instrument has been:

a. assigned.
b. negotiated.
c. obtained by fraud, and is therefore invalid.
d. obtained by fraud, but may be ratified.

A

A. assigned

52
Q

MULTIPLE CHOICE CH 29

22.	When a negotiable instrument is negotiated by delivery without indorsement, the warranty liability of the transferor runs:

a. only to the immediate transferee.
b. not to the immediate transferee, but to all subsequent transferees.
c. to both the immediate transferee and all subsequent transferees.
d. neither to the immediate transferee, nor to any subsequent transferees.

A

A. only to the immediate transferee

53
Q
  1. Coppersmith executed and delivered negotiable notes to the payee, Charlene. The payee indorsed the notes to Whitehurst but did not deliver them. Instead, she kept the notes in her possession because she wanted to collect the interest during her life and wanted the indorsee to have the notes on her death. After Charlene’s death, her executor, Cartwright, found the notes. Both Cartwright and Whitehurst sought to enforce the notes against Coppersmith. Who was entitled to do so?
A

ANS:
Cartwright. As executor of the payee, Cartwright acquired by operation of the law the right to enforce payment by assignment. The indorsement to Whitehurst was not effective to negotiate the instruments because negotiation required both indorsement and delivery by the person to whom they were then payable, and there had been no delivery.

54
Q
  1. Sue is an employee at an ABC store. One of Sue’s duties is to prepare the bank deposit at the end of the business day. Sue had a very busy day and made a few mistakes. All of the checks, except two, were indorsed with the stamp “ABC, Inc.” that ABC had provided. The bank received the deposit and noticed the lack of indorsement on the two checks. In addition, three of the checks that Sue was to include with the deposit were lost in the parking lot after closing. Phil found the checks and deposited them into his personal account. What is the effect of ABC’s indorsement on the lost checks and the lack of indorsement on the two deposited checks?
A

ANS:
A bank may provide an indorsement for its customer absent any specific prohibition on the instrument. The checks that Sue failed to stamp will be processed without any difficulty. The stamp that Sue used, with a blank indorsement, created a bearer instrument. The stamp should be changed to create a restrictive indorsement to afford greater protection. When a bearer instrument is lost, the finder (Phil), as the possessor of bearer paper, is the holder and is entitled to enforce payment. Some alternate cause of action based on another area of law would be Sue’s only hope for recovery of the lost checks.

55
Q
  1. Al was a well-respected attorney in a small town. A couple retained Al to represent them on the purchase of a home. Before closing, Al informed the couple of payments that they were required to make by check at the closing. Among the required payments the attorney told the couple to make were a check for $1,500 to Bob Brown and a check for $610 to Susan Lee. The attorney explained that the check to Brown was for a survey of the property and the check to Lee was for termite control work that the couple had authorized.

The checks were issued and taken by Al who promised to deliver them. Al did not, however, deliver them. Instead, Al forged the indorsements of the respective payees and cashed the checks. When Al was later arrested on a similar matter, the couple learned what had happened.

The couple made a claim against its bank for reimbursement, claiming the bank was not authorized to pay these checks because they had not been effectively negotiated to the bank. When the facts came to light, no person named Bob Brown had done a survey on the property, but the termite work had been done by Lee. Decide both cases.

A

ANS:
The couple will not recover on the check to Brown because the impostor rule applies when the drawer is fraudulently fooled by an employee into issuing a check to a dummy payee. However, the couple may recover on the check to Lee because this was a valid check to an actual creditor. Accordingly, the forged indorsement is not treated as effective to negotiate the Lee check. The couple had not been fooled by its employee into issuing the Lee check.

56
Q

TRUE/FALSE CH 28

  1. Commercial paper facilitates the transfer of funds and payment.
A

True

57
Q

TRUE/FALSE CH 28

  1. Instruments are always negotiable.
A

False

58
Q

TRUE/FALSE CH 28

  1. Instruments are transferable, written, signed promises or orders to pay a specified sum of money.
A

True

59
Q

TRUE/FALSE CH 28

  1. Instruments are negotiable when they contain the terms required by contract law.
A

False

60
Q

TRUE/FALSE CH 28

  1. The maker is the person who writes out and creates a promissory note.
A

True

61
Q

TRUE/FALSE CH 28

  1. The person on whom the order to pay a draft is made is called a drawer.
A

False

62
Q

TRUE/FALSE CH 28

  1. The drawee on a check is a bank.
A

True

63
Q

TRUE/FALSE CH 28

  1. The payee has no rights in an instrument until the drawer or the maker has delivered it to the payee.
A

True

64
Q

TRUE/FALSE CH 28

9.	When a drawee has signified in writing on a draft the willingness to make a specified payment, the drawee is called the acceptor.
A

True

65
Q

TRUE/FALSE CH 28

  1. A payee is not liable on an instrument until the payee transfers the instrument to someone else.
A

True

66
Q

TRUE/FALSE CH 28

  1. When a party who is not originally named in an instrument allows her name to be added to it for the benefit of another party in order to add strength to the collectability of the instrument, that party becomes a secondary obligor and assumes a liability role.
A

True

67
Q

TRUE/FALSE CH 28

  1. A drawee on a draft has no responsibility under the draft until it has accepted that instrument.
A

True

68
Q

TRUE/FALSE CH 28

  1. Revised UCC Article 3 refers to drawers, indorsers, and accommodation parties as “secondary obligors.”
A

True

69
Q

TRUE/FALSE CH 28

  1. Negotiability is the characteristic that distinguishes commercial paper and instruments from ordinary contracts.
A

True

70
Q

TRUE/FALSE CH 28

  1. A nonnegotiable instrument’s terms are not enforceable.
A

False

71
Q

TRUE/FALSE CH 28

  1. If an instrument is negotiable, it is governed by Article 2 of the UCC.
A

False

72
Q

TRUE/FALSE CH 28

  1. Negotiation of commercial paper results in lesser rights to transferees than those rights afforded assignees of contracts under contract law.
A

False

73
Q

TRUE/FALSE CH 28

  1. If an instrument is nonnegotiable, the rights of the parties are governed by the general principles of contract law.
A

True

74
Q

TRUE/FALSE CH 28

  1. A negotiable instrument may be partly printed and partly typewritten.
A

True

75
Q

TRUE/FALSE CH 28

  1. The signature on an instrument must appear at the lower right-hand corner of the face of the instrument.
A

False

76
Q

TRUE/FALSE CH 28

  1. An authorized agent signing an instrument will not be liable on the instrument if the agent discloses on the paper either the identity of the principal or the fact that the agent has signed in a representative capacity.
A

False

77
Q

TRUE/FALSE CH 28

  1. In a negotiable instrument, the promise or order to pay must be unconditional.
A

True

78
Q

TRUE/FALSE CH 28

  1. A promissory note that is payable “on the date of my marriage” is nonnegotiable even if the maker of the note marries.
A

True

79
Q

TRUE/FALSE CH 28

  1. If an order or promise is not for money, the instrument is not negotiable.
A

True

80
Q

TRUE/FALSE CH 28

  1. The requirement of a sum certain in money is fulfilled even though the interest rate changes at maturity.
A

True

81
Q

TRUE/FALSE CH 28

  1. If an instrument states no time for payment, the note is payable on demand.
A

True

82
Q

TRUE/FALSE CH 28

  1. A check that is postdated ceases to be order paper.
A

True

83
Q

TRUE/FALSE CH 28

  1. An instrument is order paper when by its terms it is payable to the order of any person described in it, or to a person or order
A

True

84
Q

TRUE/FALSE CH 28

  1. Antedating an instrument affects an instrument’s negotiability.
A

False

85
Q

TRUE/FALSE CH 28

  1. Article 3 of the UCC establishes a four year statute of limitations for most actions involving negotiable instruments.
A

False

86
Q

MULTIPLE CHOICE CH 28

  1. An unconditional written promise made by one person to another, signed by the maker, that promises to pay on demand a specific sum of money to the bearer is a:

a. nonnegotiable draft.
b. bill of exchange.
c. promissory note.
d. certificate of deposit.

A

C. promissory note

87
Q

MULTIPLE CHOICE CH 28

  1. If a check is made payable to Paolo, and Paolo signs on the back of the check, Paolo is:

a. the payee and the indorser.
b. the drawee and the indorser.
c. the payee and the endorsee.
d. only the indorser.

A

A. the payee and the indorser.

88
Q

MULTIPLE CHOICE CH 28

  1. The person to whom the order in a draft is addressed is known as the:

a. payee.
b. drawee.
c. drawer.
d. maker.

A

B. drawee.

89
Q

MULTIPLE CHOICE CH 28

  1. The party who writes or creates a promissory note is called the:

a. payee.
b. drawee.
c. drawer.
d. maker.

A

D. maker.

90
Q

MULTIPLE CHOICE CH 28

  1. When the drawee of a draft has indicated by writing or record a willingness to pay the amount specified in the draft the drawee is called a(n):

a. acceptor.
b. accommodation party.
c. payee.
d. secondary obligator.

A

A. acceptor.

91
Q

MULTIPLE CHOICE CH 28

  1. A person who becomes a party to an instrument to add strength to the instrument for the benefit of another party to the instrument is called a:

a. benefactor.
b. secondary obligor.
c. collateral obligor.
d. contingent beneficiary.

A

B. secondary obligor.

92
Q

MULTIPLE CHOICE CH 28

  1. Revised UCC Article 3 refers to which of the following parties as secondary obligors?

a. drawers
b. indorsers
c. accommodation parties
d. all of the above

A

D. all of the above

93
Q

MULTIPLE CHOICE CH 28

  1. A payee has no rights in an instrument until:

a. the drawer or the maker has delivered the instrument to the payee.
b. an acceptor has been established.
c. an accommodation party has signed the instrument.
d. a guarantor has signed the instrument.

A

A. the drawer or the maker has delivered the instrument to the payee.

94
Q

MULTIPLE CHOICE CH 28

  1. A(n) __________ instrument’s terms are enforceable, but the instrument is treated simply as a contract governed by contract law.

a. nonnegotiable
b. negotiable
c. accommodation
d. secondary

A

A. nonnegotiable

95
Q

MULTIPLE CHOICE CH 28

  1. If instrument is negotiable, it can be:

a. paid on demand.
b. cancelled by the maker.
c. assigned by contract.
d. transferred by negotiation.

A

D. transferred by negotiation.

96
Q

MULTIPLE CHOICE CH 28

  1. To be negotiable, an instrument must:

a. be in writing.
b. be signed by the maker or the drawer.
c. contain a promise or order to pay.
d. all of the above.

A

D. all of the above.

97
Q

MULTIPLE CHOICE CH 28

  1. The signature requirement, as an element of negotiability, can be met by:

a. the use of initials.
b. a mark.
c. a trade name.
d. all of the above.

A

D. all of the above.

98
Q

MULTIPLE CHOICE CH 28

  1. Action taken by one on behalf of another is:

a. agency.
b. negotiability.
c. representative capacity.
d. Identification of principal.

A

C. representative capacity.

99
Q

MULTIPLE CHOICE CH 28

  1. An instrument is conditional if:

a. it contains an order for the payment of money out of a particular fund.
b. it is to be paid from the assets of an existing trust.
c. it is to be paid from the assets of an existing estate.
d. none of the above.

A

D. none of the above.

100
Q

MULTIPLE CHOICE CH 28

  1. Which of the following terms would make an instrument nonnegotiable?

a. It is dependent upon an event.
b. It is undated.
c. It is payable in foreign money.
d. It gives the holder the right to receive interest.

A

A. It is dependent upon an event.

101
Q

MULTIPLE CHOICE CH 28

  1. An instrument is payable on demand if it is payable:

a. on or before a stated date.
b. at sight or presentation.
c. at a fixed time after acceptance.
d. all of the above.

A

B. at sight or presentation.

102
Q

MULTIPLE CHOICE CH 28

  1. An instrument is order paper if:

a. it is payable to bearer or the order of bearer.
b. it is payable to cash.
c. the last or only indorsement is a blank indorsement.
d. none of the above.

A

D. none of the above.

103
Q

MULTIPLE CHOICE CH 28

  1. Which of the following factors do not affect negotiability of an instrument?

a. A provision specifying the collateral that secures the debt.
b. The antedating of the instrument..
c. The omission of a date of execution.
d. None of the above affect negotiability.

A

D. None of the above affect negotiability.

104
Q

MULTIPLE CHOICE CH 28

  1. When ambiguous language exists:

a. words control figures if a conflict exists.
b. handwriting supersedes typewritten words or terms.
c. typewritten terms supersede preprinted terms.
d. all of the above.

A

D. all of the above.

105
Q

MULTIPLE CHOICE CH 28

  1. Article 3 of the UCC establishes a __________-year statute of limitations for most actions involving negotiable instruments.

a. one
b. two
c. three
d. four

A

C. three

106
Q
  1. George was the maker of a written promissory note that stated that $500 would be paid on the sale of George’s automobile. George initialed the note instead of writing his full name. The promissory note stated that it would be payable six months from the date. The promissory note was not dated. You now have come into possession of this note. Is this note negotiable? Discuss the elements of negotiability and whether each one has been met.
A

ANS:
This note is not negotiable. For an instrument to be negotiable, a series of elements must be satisfied. First, the note must be written. This promissory note was written. The note must be signed by the maker or drawer. George as the maker of the note has signed the document (his initials are sufficient). The exact wording of the note is unknown, but we could assume that the appropriate language establishing a promise to pay a sum certain ($500) in money is present. An unconditional promise or order to pay must exist. George left the payment contingent on the sale of his automobile, and therefore does not meet this requirement. The note must be payable on demand or at a definite time. The date of maturity of the note is not known, for it refers to a six-month time period with no established starting point. When a date is missing from commercial paper, it is deemed dated on the day that it is issued to the payee. Any holder may add the correct date.

107
Q

Conville signed a note as an officer of the Hughesville Manufacturing Corporation, but she did not name the corporation in the note or indicate that she was acting as an officer for it. Later, she was sued by the Grange National Bank, the holder of the note. She raised the defense that the corporation was liable on the note. Who was liable?

A

ANS:
Conville was personally liable on the note because she failed to disclose on the note itself both the name of the corporation and her representative capacity.

Business Law (9 decks)

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