Drawer or Maker Liability to Pay Negotiable Instrument

The video tutorial explains the primary liability of the maker or drawer of a negotiable instrument. It details how the maker of a note is primarily liable, meaning they must pay the note as promised. In the case of drafts, the drawer orders a third party to pay, and if the third party pays, they can claim repayment from the drawer. The video also addresses scenarios where there are insufficient funds in the drawer's account, emphasizing the payor's right to recuperate funds from the drawer.

What does the maker of a note promise to do?

• Modify the terms of the note

• Pay the note unconditionally according to its terms

• Transfer the note to another party

• Cancel the note upon request

In a draft, who is responsible for making the payment?

• The bank

• The presenter

• The third party payer

• The original drawer

What happens if the third party payer makes a payment on a draft?

• The payer must open a new account

• The payer can claim repayment from the original drawer

• The payer must issue a new draft

• The payer has no further obligations

What is the consequence if there are insufficient funds in the drawer's account?

• The payor must cover the deficit

• The draft is automatically canceled

• The payor can claim the funds from the original drawer

• The drawer is not liable

What right does the payor have if the account no longer exists?

• The right to transfer the liability

• The right to cancel the payment

• The right to issue a new draft

• The right to recuperate funds from the original drawer