Highlight the two categories of when warranties arise with negotiable instruments. Highlight the complete word (s) or phrase (s), including any punctuation. Click here for a tutorial on how to complete a Highlighting Question.

The two categories of when warranties arise with negotiable instruments are the categories of signature liability and warranty liability.

Explanation:

Signature liability is the category in which the person in whose custody the negotiable instrument is, is liable for the instrument if his signature appears on the instrument. Warranty liability is the category in which the company issuing the negotiable instrument is responsible for the coverage of the warranty of the instrument.