Negotiable Instruments and Credit
A mortgage will typically contain:
a description of the property and the amount of debt involved
A(n) ____ is a legally binding written order to pay a fixed sum of money that involves three parties.
draft
A mechanic's lien is also called an artisan's lien.
false
A mechanic's lien is the most common lien on personal property.
false
A negotiable instrument is a promise by one party to pay a undefined sum of money to another party. There are two parties: the maker and the payee. While the amount to be paid may vary, the date of payment must be set at a specific time in the future.
false
A note involves two parties, the maker and the payee. Payment must be on demand.
false
According to the Statutes of Fraud, mortgages may be either oral or in writing.
false
Negotiable instruments payable "to bearer" are considered the safest form.
false
Promises to pay include drafts and checks.
false
The only property that is typically exempt from attachment is personal property worth over $1,000.
false
To be ordinary holder of a negotiable instrument, the holder must give value for it, take it without knowledge that it is overdue or defective, and must take it in good faith.
false
To meet the UCC's requirements for negotiability, an instrument must be payable to a specific party.
false
When real estate is used to back up a note, it is called a collateral note.
false
When the maker of a note promises to repay the note in specific installments over time, it is a balloon note.
false
In General Electric Business Financial Services v. Silverman, where Silverman failed to repay a loan from GE Financial after his company went bankrupt, despite having signed a guarantee to repay the loan even if the company went bankrupt, the district court:
granted the plaintiff's movement for summary judgment because the Illinois Credit Agreement Act bars affirmative defenses that rely on oral promises that contradict the written terms of the agreement
A promise to pay a certain sum of money to another party is a type of commercial paper called a(n):
note
In a suretyship:
the credit of a third party secures a debt
A mortgagor is:
the debtor on a mortgage
A guarantor is generally the same as:
the surety
A cashier's check is a form of check in which the bank is both the drawer and the drawee.
true
A check is a draft drawn on a bank and payable on demand.
true
A negotiable instrument may be transferred in two basic ways. If the instrument is made "to the order" of the payee, the payee must (1) endorse the instrument and (2) deliver the instrument to a third party. If the instrument is made "to bearer," the party in possession of the instrument is required only to deliver it to transfer it.
true
An artisan's (possessory) lien attaches to personal property.
true
If a commercial instrument is nonnegotiable, it falls under the common law, not the UCC.
true
Orders to pay include drafts and checks.
true
Real estate is typically financed by borrowing money and securing the loan with a mortgage.
true
The drawee owes money to the drawer in a negotiable instrument.
true
The mortgagee is the creditor who makes a mortgage.
true
The party to receive a payment from a negotiable instrument is called the payee.
true
The party who agrees to make a payment to another party, based on a document presented to it, such as a bank, is called the drawee.
true
The party who issues or creates a document that requests payment, probably from a bank, is called the drawer.
true
To meet the UCC's requirements for negotiability, an instrument must be in writing.
true
To protect the rights of the mortgagee, a mortgage should be recorded with a state official.
true
When the payee is concerned about the quality of a draft, it may be submitted to the drawee for confirmation. That is called an acceptance or bankers' acceptance.
true
