What are the requirements for imposing secondary liability for a negotiable instrument?
What will be an ideal response?
A party is secondarily liable on a negotiable instrument only if the following requirements are met:
The instrument is properly presented for payment. Presentment is a demand for acceptance or payment of an instrument made upon the maker, acceptor, drawee, or other payer by or on behalf of the holder.
The instrument is dishonored. An instrument is a dishonored instrument when acceptance or payment of the instrument is refused or cannot be obtained from the party required to accept or pay the instrument within the prescribed time after presentment is duly made.
Notice of the dishonor is timely given to the person to be held secondarily liable on the instrument. A secondarily liable party cannot be compelled to accept or pay an instrument unless proper notice of dishonor has been given.
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