Which of the following statements is true of the obligation of the maker?
A) It is owed to a person who is not entitled to enforce the instrument.
B) It is given to a nonholder in possession of the instrument, who does not have the rights of a holder.
C) It is owed to any indorser who paid the instrument pursuant to her indorser's liability.
D) It is to pay the negotiable instrument even if it has not been signed by the maker.

Question

Quizplus · Accepted Answer

The obligation of the maker is owed to (1) a person entitled to enforce the instrument or (2) any indorser who paid the instrument pursuant to her indorser's liability. A person entitled to enforce an instrument includes (1) the holder of the instrument, (2) a nonholder in possession of the instrument who has the rights of a holder, and (3) a person not in possession of the instrument who has the right to enforce the instrument under Section 3-309, which deals with lost, destroyed, or stolen instruments.

Which of the Following Statements Is True of the Obligation