Future Business Leaders of America (FBLA) Business Law Practice Exam

Who is referred to as the maker in a financial note?

1. The person who guarantees the loan

2. The person who serves as a witness

3. The person who promises to pay money

4. The person accepting the terms of the note

The correct answer is: The person who promises to pay money

In the context of a financial note, the term "maker" specifically refers to the individual or entity that promises to pay the amount stated in the note. This is the person who is legally obligated to repay the borrowed amount, often under specific terms such as interest and repayment schedule. The maker essentially signs the financial note, demonstrating their agreement to fulfill the payment obligation. This role is fundamental in lending transactions, as it identifies who is responsible for the debt. Understanding this term is crucial in financial and legal contexts, particularly for contracts and obligations. While other roles, such as a guarantor or witness, exist in financial transactions, they do not fulfill the primary obligation of making payments as the maker does. Additionally, merely accepting the terms of the note does not inherently constitute becoming the maker, unless that acceptance is accompanied by the promise to pay.