Asked by
Aideen Reyes
on Nov 10, 2024
Verified
Read the following statements with regard to the parties involved with negotiable instruments and indicate which is false.
A) The person who signs and issues the cheque is the drawer. The person who is owed the money and receives the cheque is the drawee.
B) A person who signs a draft is a drawer; the party commanded to pay is the drawee.
C) An acceptor of a draft will become liable to the payee for the amount of the draft.
D) The payee of a negotiable instrument can negotiate the instrument to a holder who will be remote in relation to the drawer.
E) The person who signs a promissory note is the maker of the note and, unlike a cheque, the note will not include a drawee.
Holder
The individual or entity that possesses or controls a particular document, instrument, or security, having certain rights to it.
Drawee
A party upon whom a cheque or draft is drawn, typically a bank, responsible for paying the amount specified to the payee.
Negotiable Instruments
Financial documents promising payment to the holder, such as checks, bills of exchange, and promissory notes.
- Grasp the legislative system surrounding negotiable instruments, including but not limited to, cheques and drafts, alongside the rights of involved entities.
Verified Answer
SS
Learning Objectives
- Grasp the legislative system surrounding negotiable instruments, including but not limited to, cheques and drafts, alongside the rights of involved entities.