What does it mean for liability on a negotiable instrument to be secondary liability?
A) The liability is for a small amount.
B) The liability arises only if the party with primary liability defaults and does not pay.
C) There are two parties to share the secondary liability.
D) It means that the liability relates to a two-party negotiable instrument.
E) It means that the party only owes one-half of the debt

Question

Quizplus · Accepted Answer

Secondary liability on a negotiable instrument means that the liability only arises if the party with primary liability defaults and does not pay. In other words, the secondary party is only liable if the primary party fails to meet their obligations.

What Does It Mean for Liability on a Negotiable Instrument