Fanny signs a note "payable to the order of Guaranty Bank." Guaranty indorses the note in blank and negotiates it to Haji, who sells it to Iona. Liability associated with the transfer of the note from Haji to Iona is
A) no liability.
B) contractual liability.
C) signature liability.
D) warranty liability.

Question

Quizplus · Accepted Answer

Warranty liability arises when a negotiable instrument is transferred, and the transferor provides certain implied warranties to the transferee, such as the instrument being genuine and not altered.

Fanny Signs a Note "Payable to the Order of Guaranty