Sarah Has a Checking Account at First Bank

question 5

Multiple Choice

Sarah has a checking account at First Bank.Orrin steals one of her blank checks, writes a check for $250 to himself, and then forges Sarah's signature.Orrin then indorses the instrument to Paul in payment of a debt.Paul, who does not know of the forgery, presents the instrument to First Bank for payment.At First Bank's request, Paul indorses the instrument, and the bank then pays him $250.Which of the following is correct?

• A) Orrin has breached the warranties on presentment.
• B) Paul has breached the warranties on presentment.
• C) Sarah has breached the warranties on presentment.
• D) All of these are correct.
• E) Both Paul and Orrin have breached the warranties on presentment.

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