Jennifer signs a promissory note to pay $2,500 to Clara. Clara negotiates the instrument and indorses it to Anthony. Anthony alters the note to make the payment amount $25,000 and negotiates the note to Nicholas. Nicholas indorses the note and negotiates it to Mack. Nicholas and Mack are both unaware of Anthony's alteration. If Mack presents the note to Jennifer for payment, how much, if anything is Jennifer obligated to pay?

Question

Quizplus · Accepted Answer

Jennifer is only obligated to pay the original amount of the promissory note, which is $2,500. The alteration made by Anthony is invalid and does not bind Jennifer or subsequent holders of the note. Therefore, Jennifer is only liable for the original amount of the note.

Jennifer Signs a Promissory Note to Pay $2,500 to Clara