Which term is linked to the law governing payment obligations in negotiable instruments?

• A. Primary liability
• B. Uniform Commercial Code (UCC)
• C. Personal defense
• D. Bill of lading

Answer: (B)

The Uniform Commercial Code is the law that governs payment obligations in negotiable instruments. Negotiable instruments like checks and promissory notes require a promised or unconditional promise to pay a specific amount. The UCC, especially Article 3, outlines who is obligated to pay (the maker or drawer has primary liability) and who can be held responsible if payment is not made (endorse rs have secondary liability), as well as when payment must be made, presentment rules, and defenses that can be raised. This framework ensures that holders can enforce payment and understand the rights of all parties involved in the transfer and collection of these instruments. Other terms describe liability roles or unrelated concepts, but they don’t identify the governing statute.