Law Ch 25
Gwen deposits $5,000 with Home State Bank on July 1, 2016. Home State Bank promises to repay Gwen the $5,000 plus 3 percent annual interest on July 1, 2021. Home State Bank issued to Gwen a. a check. b. a trade acceptance. c. a certificate of deposit. d. a nonnegotiable instrument.
a certificate of deposit
To borrow the funds to pay tuition at Alpha College, Bea signs an instrument unconditionally promising to pay to "Country Loan Corporation" $7,500 with interest in installments with the final payment due June 1, 2030. The instrument that Bea signed is most likely a. an order to pay. b. a certificate of deposit. c. a promissory note. d. a draft.
a promissory note
To obtain office supplies for Doctors Medical Clinic, Emma executes a draft in favor of Floyd. A draft is a. a conditional promise to pay money. b. an unconditional written order to pay money. c. a qualified promise to set aside a sum of money. d. a restricted promise to deliver goods at a future date.
an unconditional written order to pay money.
Gail owes $5,000 in unpaid taxes. Using the back of an old t-shirt, she executes an instrument for $5,000 that otherwise meets the requirements for negotiability. This instrument is likely a. nonnegotiable, because the government does not appreciate it. b. negotiable. c. nonnegotiable, because an instrument must be on paper. d. nonnegotiable, because a t-shirt is not sufficiently permanent.
negotiable
On May 1, Mia signs a check that is payable to the order of Nicole and that is dated July 1. This check is a. nonnegotiable, because it is payable to a corporation. b. nonnegotiable, because it is postdated. c. nonnegotiable, because it is signed by the drawer. d. negotiable.
negotiable
Jacob signs a promissory note payable to Kent "with interest" on which he conspicuously notes that it is "nonnegotiable." This instrument is a. nonnegotiable, because it does not specify a rate of interest. b. nonnegotiable, because the exact amount payable cannot be determined from the face of the instrument. c. negotiable. d. nonnegotiable, because it includes the notation "nonnegotiable."
nonnegotiable, because it includes the notation "nonnegotiable."
Consumer Loans LLC signs an instrument payable to the order of Diana that states, "The maker of this note at the date of maturity, April 1, 2019, can extend the time of payment, but for no more than a reasonable time." This instrument is a. negotiable. b. nonnegotiable, because it is payable to a specific payee. c. nonnegotiable, because it includes an extension clause. d. nonnegotiable, because it is not payable within a definite time.
nonnegotiable, because it is not payable within a definite time.
Laura writes on a piece of paper, "I owe you $400," signs it, and gives it to Max. This instrument is a. not negotiable, because it does not recite any consideration. b. not negotiable, because it does not include an express promise to pay. c. negotiable. d. not negotiable, because it does not state any conditions to payment.
not negotiable, because it does not include an express promise to pay.
On behalf of Bubbly Drinks Company, Calvin signs an instrument in which he promises to deliver 100 cases of soda as payment to Dispatch & Delivery, Inc., on April 1. This instrument is a. not negotiable, because soda is not a medium of exchange authorized or adopted by a government as currency. b. not negotiable, because it does not identify a specific soda. c. negotiable. d. not negotiable, because it does not recite any consideration.
not negotiable, because soda is not a medium of exchange authorized or adopted by a government as currency.
LNG Corporation and Midstates Utility Company enter a contract for a sale of liquefied natural gas by LNG to Midstates. LNG draws a draft unconditionally ordering Midstates Utility to pay $50,000 to LNG's order in sixty days. Midstates Utility signs and dates the draft. On this instrument, LNG is a. the drawer. b. the trader. c. the drawee. d. the maker.
the drawer