Fran signs a note "payable to the order of Guaranty Bank." Guaranty indorses the note in blank and negotiates it to Holly, who sells it to Iona. Liability associated with the transfer of the note from Holly to Iona is

Question

Fran signs a note "payable to the order of Guaranty Bank." Guaranty indorses the note in blank and negotiates it to Holly, who sells it to Iona. Liability associated with the transfer of the note from Holly to Iona is​

Quizplus · Accepted Answer

The liability associated with the transfer of the note from Holly to Iona is warranty liability. When a negotiable instrument is transferred, the transferor provides certain warranties to the transferee, such as the warranty that the instrument has not been altered and that the transferor has good title to it.

Fran Signs a Note "Payable to the Order of Guaranty