________ refers to a situation in which certain parties are discharged from liability on an instrument by the action of the holder.
A) Impairment of the right of recourse
B) Fraud in the inception
C) Fraud in the inducement
D) Discharge in bankruptcy

Question

Quizplus · Accepted Answer

Impairment of the right of recourse refers to a situation where the holder of a negotiable instrument acts in such a way that discharges some parties from their liability on the instrument. This can happen, for example, if the holder fails to take certain actions required to maintain the instrument's enforceability against the endorsers or other secondary parties.

________ Refers to a Situation in Which Certain Parties Are