Question

Mary Jones and John Jones received a check made payable to the order of Mary Jones and John Jones. They each endorsed the check and negotiated it to a creditor as part payment on a debt. The check was subsequently dishonored. What is Mary and John's liability on the check to the creditor?

A) Neither is liable on the check: only the drawer is liable when a check is dishonored.
B) Whichever party's name is first in the chain of endorsements is liable.
C) Mary is liable for one half of the amount and John is liable for one half of the amount.
D) Mary and John have joint and several liability so either could be liable for the full amount.

Answer 1

Mary and John have joint and several liability so either could be liable for the full amount of the dishonored check.

Step-by-step explanation:

Mary and John have joint and several liability, so either could be liable for the full amount of the dishonored check. When two parties are jointly and severally liable, it means that each party is individually responsible for the entire obligation. This means that the creditor can choose to pursue either Mary or John for the full amount owed.