Tom Indorsed a Check Made Payable to the Order of Tom

question 47

Multiple Choice

Tom indorsed a check made payable to the order of Tom Jones as follows: Pay Raymond Berry
/s/ Tom Jones
Raymond negotiated the check to his landlord for his rent. Raymond indorsed the check as follows:
Without Recourse
/s/ Raymond Berry
With regard to Tom's indorsement, which statement is correct?

• A)Tom has secondary contractual liability on the check as an indorser.
• B)Tom has no contractual liability on the check because he is the payee.
• C)Tom has primary contractual liability on the check as payee.
• D)Tom eliminated his liability as an indorser by the type of indorsement he used.

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Definitions:

Substantial Performance

A legal concept that indicates a party has fulfilled enough of its contractual obligations to warrant payment or consideration, even if minor details remain uncompleted.

Promise to Build a House

An agreement, typically formal and legally binding, where one party commits to constructing a residential dwelling for another.

Constructive Condition

An implied condition in contracts that must be met for the parties' performance obligations to arise, even if not explicitly stated.

Implied-In-Law Condition

A condition in a contract created by the court to ensure fairness, which is not explicitly stated in the contract itself.