An indorser's implied contract to pay a subsequent holder in the event that an instrument is dishonored is known as an indorser's?
A. duty
B. accommodation
C. primary liability
D. secondary liability
I chose Secondary liability
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That's correct! An indorser's implied contract to pay a subsequent holder in the event that an instrument is dishonored is known as an indorser's secondary liability.
To determine this answer, you need to understand the concept of secondary liability in the context of endorsing negotiable instruments. In the case of negotiable instruments, such as checks or promissory notes, an indorser is a person who signs the instrument and transfers it to another person. The indorser's secondary liability means that if the primary party, such as the maker of a promissory note or the drawer of a check, fails to pay, the indorser is obligated to pay the amount due to the subsequent holder.
Therefore, the correct answer is D. secondary liability.