A situation in which certain parties are discharged from liability on an instrument by the action of the holder is called ________.
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 occurs when the holder of an instrument takes actions that discharge certain parties from liability, such as releasing collateral or extending the due date without consent.

A Situation in Which Certain Parties Are Discharged from Liability