Which of the Following Actions by the Holder Causes an Impairment

question 16

Multiple Choice

Which of the following actions by the holder causes an impairment of the right of recourse?

• A) releasing an obligor party from liability
• B) withholding collateral that would benefit that party
• C) writing "canceled" on the face of the instrument
• D) destruction of the instrument with the intent of eliminating the obligation

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Definitions:

Franchisor

A business entity that grants licenses to franchisees to operate under its brand and sell its products or services.

Negotiate

The process of discussing terms and reaching agreements in various contexts, such as business deals, contracts, or disputes.

Large Volume Purchases

Transactions involving the procurement of goods in large quantities, typically resulting in cost savings or discounted pricing from suppliers.

Vertical Merger

A merger between two companies that operate at different levels within the production process of a specific industry.