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Mark gives a bearer note for $50 to Joe in exchange for an excellent dinner at Joe's restaurant. Joe delivers the note to Sue for $50 and Sue takes it to Mark to be paid. If Mark says the note was originally written for only $5, what can Sue do?
A) Hold Joe liable for breach of warranty.
B) Get $50 from Mark.
C) Hold Joe liable for breach of contract.
D) Only get $5 from Mark.
Breach of Warranty
The violation of a guarantee or promise regarding the quality or condition of a product.
Bearer Note
Bearer Note is a type of negotiable instrument, the benefits of which are payable to whoever holds the note, making it transferable by mere delivery.
Recourse
refers to the right to demand a legal or financial remedy when a contractual obligation is not honored by the other party.
- Fathom the idea behind "without recourse" endorsements and their implications for liability.
- Recognize the warranties provided by a transferor of a negotiable instrument.
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Learning Objectives
- Fathom the idea behind "without recourse" endorsements and their implications for liability.
- Recognize the warranties provided by a transferor of a negotiable instrument.
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