Efron borrows money to pay his tuition and signs a note payable to First Citizens Bank. The bank assigns the note to Guaranty Bank. The assignment
A) does not affect Efron's obligation to pay the note as promised.
B) frees Efron of the obligation to pay the note.
C) results in Guaranty Bank's co-liability on the note with Efron.
D) results in Guaranty Bank's co-liability on the note with First Citizens Bank.

Question

Quizplus · Accepted Answer

The assignment of the note from First Citizens Bank to Guaranty Bank does not affect Efron's obligation to pay the note as promised. Efron is still responsible for paying the debt to the new holder of the note (Guaranty Bank) as per the terms of the original agreement. Assigning the note simply transfers the right to collect payment from the original holder (First Citizens Bank) to the new holder (Guaranty Bank).

Efron Borrows Money to Pay His Tuition and Signs a Note