Because he or she was in the best position to prevent wrongdoing with respect to an instrument, transfer and presentment warranties attempt to shift liability to
A)the drawee or payee on an instrument.
B)the holder of an unauthorized item when the wrongdoing is discovered.
C)the party on whose account an unauthorized item is made or drawn.
D)the person who dealt face to face with the wrongdoer.

Question

Quizplus · Accepted Answer

Transfer and presentment warranties are designed to shift liability to the person who was in the best position to prevent the wrongdoing, which is typically the person who dealt directly with the wrongdoer. This approach is based on the principle that this person could have taken steps to verify the authenticity of the transaction or the authority of the person conducting it.

Because He or She Was in the Best Position to Prevent