When a negotiable instrument is lost, this automatically discharges the obligation of the holder.

Question

Quizplus · Accepted Answer

The loss of a negotiable instrument does not automatically discharge the obligation of the holder. The holder can take steps to obtain a duplicate or enforce the instrument against the issuer or other parties liable on the instrument, subject to the fulfillment of certain conditions and providing adequate protection against loss to the issuer.

When a Negotiable Instrument Is Lost, This Automatically Discharges the Obligation