Liability of Warrantor of Negotiable Instrument for Damages

The video discusses the liability of a warrantor on a negotiable instrument, focusing on the extent of damages that can be recovered. It explains that damages include the unpaid amount, enforcement fees, potential attorney fees, and lost interest. Recovery is contingent on good faith, and any intent to deceive can be a defense against liability.

What is the primary focus of warranty liability on negotiable instruments?

• Calculating the interest rate on the instrument

• Determining the extent of damages recoverable

• Identifying the issuer of the instrument

• Ensuring the instrument is always paid on time

Which of the following is NOT a type of damage that can be recovered under warranty liability?

• Actual damages

• Attorney's fees

• Lost interest

• Future profits

What additional cost might be recovered if legal action is necessary?

• Travel expenses

• Consultation fees

• Court fees

• Attorney's fees

What condition must be met for warranty liability to be enforced?

• The instrument must be issued by a bank

• The warranty must be enforced in good faith

• The instrument must be over a certain value

• The warranty must be signed by both parties

What could potentially serve as a defense against warranty liability?

• There was intent to deceive or defraud

• The instrument was not signed

• The instrument was paid on time

• The instrument was issued in a different country