Chapter 25 Quiz

Kris transfers a note, on which Liu is the maker, to Mia, who takes it for value and in good faith. Mia knows that Kris breached the contract underlying the note, giving Liu a defense against payment. With respect to this note, Mia is a. A knowledgeable holder in due course b. An ordinary holder c. An ordinary holder in due course d. An ordinary note taker

b. An ordinary holder

Dru signs a check payable to Excel Services, Inc., and gives it to Excel, leaving the amount blank but authorizing Excel to fill it in for $1,000. Excel fills in $1,500 and negotiates the check to Friendly Credit Corporation, an HDC. Friendly Credit can enforce the check for a. $0 b. $500 c. $1,000 d. $1,500

c. $1,000

Todd indorses a check, "Pay to Interstate Trucking if they deliver the lumber by May 1, 2010." This is a. A blank indorsement b. A qualified indorsement c. A restrictive indorsement d. A special indorsement

c. A restrictive indorsement

Demi possesses a check that is "payable to bearer." Esther steals the check and delivers it to Fern. All rights to the check are a. Demi's b. Esther's c. Fern's d. No one's

c. Fern's

Owen is a holder of a promissory note obtained from Purchase Money, Inc. Regarding the defenses against payment of the note to which Purchase Money is subject, Owen, as an ordinary holder, is subject to a. More defenses b. No defenses c. Some defenses, but not as many d. The same defenses

d. The same defenses