With regard to negotiable instruments, which of the following is false?
A) A drawer of a cheque can refuse to pay any holder of it if the drawer can prove that the payee obtained the cheque by fraud.
B) A cheque is a bill of exchange drawn on a bank, payable on demand.
C) Bills of exchange can be made payable for some future date.
D) A negotiable instrument used to advance credit in a consumer transaction must be marked "consumer purchase".
E) A cheque that has been certified cannot be countermanded by the drawer.

Question

Quizplus · Accepted Answer

A drawer of a cheque cannot refuse to pay a holder in due course, even if the payee obtained the cheque by fraud, as the holder in due course is protected from such defenses.

With Regard to Negotiable Instruments, Which of the Following Is