Joan carefully completes and signs a $1,000 note payable to Pete.Pete skillfully changes the amount of the note to $10,000,and negotiates it to Hilda for that amount.Hilda qualifies as a holder in due course.When Hilda presents the altered note to Joan for payment,Joan refuses to pay a penny more than $1,000.Which of the following is true?
A)Joan is not liable to Hilda.
B)Joan is liable to Hilda for $1,000.
C)Joan is liable to Hilda for $10,000.
D)Joan's liability to Hilda will be determined by the relative negligence of Joan and Hilda.

Question

Quizplus · Accepted Answer

One of the most common ways that an obligor is discharged from his liability is alteration of the instrument.

Joan Carefully Completes and Signs a $1,000 Note Payable to Pete.Pete