Unqualified indorsers must pay any dishonored instrument to the holder or to any subsequent according to its terms,when issued or properly completed.

Question

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This statement is true. According to the Uniform Commercial Code (UCC), a person who indorses a negotiable instrument without qualification (i.e. simply signs their name on the back) is liable for payment if the instrument is dishonored. They must pay the holder or any subsequent holder according to the terms of the instrument, provided it was issued or properly completed.

Unqualified Indorsers Must Pay Any Dishonored Instrument to the Holder