The holder of an instrument wants the instrument to be paid to a specific person,ensure that the amount mentioned on the instrument is deposited in that person's account.The holder does not want to be liable to that person in the event that the instrument is not paid.In this scenario,the holder should most likely execute a ________.
A) blank, qualified, restrictive indorsement
B) special, qualified, restrictive indorsement
C) special, qualified, unrestrictive indorsement
D) blank, qualified, unrestrictive indorsement

Question

Quizplus · Accepted Answer

A special indorsement specifies the person to whom the instrument is to be paid, and a qualified indorsement limits the endorser's liability for payment. A restrictive indorsement restricts the further negotiation of the instrument, ensuring that it is paid to the specified person. Therefore, a special, qualified, restrictive indorsement would meet the requirement of depositing the amount in the specified person's account and protect the holder from liability if the instrument is not paid.

The Holder of an Instrument Wants the Instrument to Be