Which of the following actions by a holder constitutes the complete cancellation of a negotiable instrument?
A) destruction or mutilation of the negotiable instrument to eliminate obligation
B) deliberately striking out the signature of an indorser
C) releasing an obligor from liability
D) surrendering collateral without the consent of the parties who would benefit from it

Question

Quizplus · Accepted Answer

Destruction or mutilation of the negotiable instrument to eliminate obligation is the only action among the given choices that constitutes the complete cancellation of a negotiable instrument. This is because the destruction or mutilation of the original document renders it completely void and unusable, thereby eliminating any obligations associated with it. Deliberately striking out the signature of an indorser, releasing an obligor from liability, or surrendering collateral without the consent of the parties who would benefit from it do not fully cancel the negotiable instrument.

Which of the Following Actions by a Holder Constitutes the Complete