BLAW FINAL
Which of the following has been held to destroy the negotiability of an instrument and to render its transfer a contractual assignment? a. "I wish you would pay." b. "Pay to the order of John Jones." c. "Pay bearer." d. None of the above.
"I wish you would pay."
Which of the following would be an unconditional promise or order to pay? a. "I hereby acknowledge my debt to John Jones." b. "I hereby assign all my rights under this instrument to John Jones." c. "Pay to the order of bearer ten dollars." d. "IOU fifty dollars."
"Pay to the order of bearer ten dollars."
Which of the following notes would not be negotiable? A written, signed promise to pay: a. $50,000 to the order of Crouch, and the maker of the note orally stated to Crouch that the money would only be paid if all contractual specifications were met. b. $500 and a rick of firewood on or before September 10. c. which includes a statement that, "This note is given in partial payment for a piano to be delivered in one week from date in accordance with a contract of this date between the maker and the payee." d. All of the above.
$500 and a rick of firewood on or before September 10.
For how long is an oral stop payment order valid? 14 calendar days. 30 calendar days. 90 calendar days. 6 months.
14 calendar days.
A check that is made out to "Cash" and signed by the writer is: a. A void instrument b. A revocable instrument c. An order instrument d. A bearer instrument
A bearer instrument
Which of the following would qualify as a "check" under the terms of the Code? A. A money order B. A treasury bill C. A promissory note D. A certificate of deposit
A money order
Which of the following is not a negotiable instrument? A check. A draft. A certificate of deposit. A stock certificate.
A stock certificate.
Which of the following aspects of an otherwise negotiable promissory note will render it non-negotiable? A. The maker is obligated to pay a sum certain to the payee but may instead deliver to the payee goods of equal value. B. The maker has the right to prepay the note, subject to a prepayment penalty of 10% of the amount prepaid. C. The maker is obligated to pay the payee's costs of collection upon default by the maker. D. The maker intentionally using a rubber stamp to sign the note
A. The maker is obligated to pay a sum certain to the payee but may instead deliver to the payee goods of equal value.
A promise or order is payable at a definite time if it is payable: a. at a time readily ascertainable at the time the promise or order is issued. b. at a fixed date or dates. c. at a definite period of time after sight or acceptance. d. All of the above.
All of the above.
A promise or order is unconditional unless it states that: a. there is an express condition to payment. b. the promise or order is subject to or governed by another writing. c. rights or obligations concerning the order or promise are stated in another writing. d. All of the above.
All of the above.
The UCC states that an instrument fulfills the requirements of being payable to bearer if it: a. states it is payable to bearer or the order of bearer. b. does not state a payee. c. states it is payable to "cash" or to the order of "cash." d. All of the above.
All of the above.
Which of the following is true of a collecting bank? A collecting bank is an agent of the owner of an item until settlement becomes final. The agency relationship between a collecting bank and the owner of an item, once settled, changes to a debtor-creditor relationship. A collecting bank may be a subagent of the owner until settlement becomes final. All of the above. None of the above.
All of the above.
If Margie makes out a check for $27.50 when she has only $10 in her account, her bank may: refuse to pay the check. pay the check. bill Margie for $17.50 and service charge. Any of the above.
Any of the above.
Which article of the UCC deals with "negotiable instruments"? Article 1. Article 2. Article 3. Article 9.
Article 3.
An instrument must be signed to qualify as a negotiable instrument. Which of the following statements is true of this basic requirement? A. An instrument in the form of a note must be signed by the payee who accepts the promise of the issuer. B. An instrument in the form of a draft must be signed by the person giving the instruction to pay. C. An instrument is considered to be negotiable only when the maker signs by writing his name on it. D. A person or company cannot authorize an agent to sign instruments for it.
B. An instrument in the form of a draft must be signed by the person giving the instruction to pay.
Which of the following will destroy the negotiability of an instrument? A. Postdating it B. Conditioning payment on the payee's performance C. Permitting the holder to extend the payment date D. Antedating it
B. Conditioning payment on the payee's performance
If an instrument is nonnegotiable: A. the Code controls the rights, and the general rules of property law control liabilities of the parties involved. B. the general rules of contract law control the rights and liabilities of the parties involved. C. the Code controls the rights, and the general rules of comparative law control the liabilities of the parties involved. D. the general rules of tort law control the rights and liabilities of the parties involved.
B. the general rules of contract law control the rights and liabilities of the parties involved.
A draft is a: A. two-party instrument. B. three-party instrument. C. single party instrument. D. debit instrument.
B. three-party instrument.
Words that describe negotiability are: "Pay to the order of." "Pay to bearer." "Pay to assignees of." Both (a) and (b).
Both (a) and (b).
To have the full benefit of negotiability, negotiable instruments must: a.meet the requirements of negotiability. b.meet the requirements of negotiability and be acquired by a party who notified the maker or drawer of the transfer. c.be acquired by a holder in due course. d.Both (a) and (c).
Both (a) and (c).
To have the full benefit of negotiability, negotiable instruments must: a. meet the requirements of negotiability. b. meet the requirements of negotiability and be acquired by a party who notified the maker or drawer of the transfer. c. be acquired by a holder in due course. d. Both (a) and (c).
Both (a) and (c).
An instrument is payable to order if it is payable: a. to the order of an identified person. b. to an identified person or order. c. Both of the above. d. None of the above
Both of the above.
Which of the following would cause a promissory note to be non-negotiable? A. An acceleration clause that allows the holder to move up the maturity date of the note in the event of default. B. An extension clause that allows the maker to elect to extend the time for payment to a date specified in the note. C. A clause that allows the maker to satisfy the note by the performance of services or the payment of money. D. A due date is not specified in the note
C. A clause that allows the maker to satisfy the note by the performance of services or the payment of money.
Which of the following statements will satisfy the basic requirement of a negotiable instrument to be in writing? A. Only instruments that are handwritten are considered to be in writing. B. An instrument written on a piece of wrapping paper will be considered a poor business practice and will not be negotiable. C. Writing does not have to be on any particular material, all that is required is that the instrument be in writing to be negotiable. D. An instrument written in pencil does not qualify as a negotiable instrument.
C. Writing does not have to be on any particular material, all that is required is that the instrument be in writing to be negotiable.
A note which contains the statement, "I owe you $500": A. constitutes an order to pay. B. constitutes a promise to pay. C. is not a negotiable instrument. D. is a negotiable instrument
C. is not a negotiable instrument.
A bank issues a negotiable instrument that acknowledges receipt of $50,000. The instrument also provides that the bank will repay the $50,000 plus 8% interest per annum to the bearer 90 days from the date of the instrument. The instrument is a A. Certificate of deposit. B. Time draft. C. Trade or banker's acceptance. D. Cashier's check
Certificate of deposit.
All of the following are types of negotiable instruments except: a. Conditional promises to pay b. Certificates of deposit c. Drafts d. Checks
Conditional promises to pay
Richard borrowed $100 from his friend, Leonard Smith. Richard signed a handwritten note stating, "I promise to pay $100 to the order of Leonard Smith." Under these circumstances: A. the note is negotiable because it is a simple contract. B. the note is not negotiable because it does not acknowledge the reason for the debt. C. the note is not negotiable because it does not state the time payment is due. D. the note is negotiable because it meets the requirements for negotiability.
D. the note is negotiable because it meets the requirements for negotiability.
Which of the following would not be considered "money" within the meaning of the Code? a. Diamonds b. Mexican pesos c. German marks d. Nigerian naira
Diamonds
A statement in an instrument that only allows payment to be made from a designated fund: a. Renders the note nonnegotiable b. Does not render the note nonnegotiable c. Creates a conditional promise d. Constitutes fraud
Does not render the note nonnegotiable
A check which was supposed to be issued to "Marie Simmes" was mistakenly made out to "Mary Symmes." Marie's only option in collecting the money for the check is to have the drawer prepare a correct check to replace the one on which her name was misspelled. T/F
F
A forged indorsement is valid. T/F
F
A holder does not include a person who is in possession of a negotiable instrument that is payable to bearer. T/F
F
A negotiation is void if the transaction in which it occurs is void T/F
F
A payor bank is required to dishonor an uncertified check that is more than six months old. T/F
F
A qualified indorsement destroys negotiability T/F
F
An indorsement "Pay Alice Adams" is an assignment rather than a negotiation since it lacks words of negotiability. T/F
F
An instrument payable at a fixed time subject to acceleration by the holder is not negotiable T/F
F
An instrument paying a fixed amount in Japanese yen is not negotiable; the instrument must be payable in money authorized or adopted by the U.S. as part of its currency. T/F
F
An instrument which is ambiguous as to whether it is a draft or note, such as, "To A: On demand I promise to pay $200 to the order of B. Signed, C" must be treated as a note and be presented to C for payment. T/F
F
Constructive notice through public filing or recording is sufficient notice to prevent a person from be-ing a holder in due course. T/F
F
Kenneth deposits three checks for $275, $150, and $100 and asks for $120 in cash. In tracing the de-posit to determine if value was given, the Code would follow the "LIFO" or "last-in, first-out" method of accounting. T/F
F
Postdating an instrument will destroy its negotiability T/F
F
Subsequent indorsers are always bound by an indorsement in trust T/F
F
The "value" requirement of a holder in due course is the same as "consideration" for a contract. T/F
F
The Code, in revisions to both Articles 3 and 4, now states that "ordinary care" requires a bank to ex-amine every check that it pays and that the bank will be otherwise liable. T/F
F
The drawee is the individual who signs a check and promises to pay T/F
F
The principal advantage of negotiable instruments is their safety T/F
F
The shelter rule applies even if the transferee was a party to fraud or illegality. T/F
F
Whether a holder has notice is determined by a wholly objective standard under the Code T/F
F
A holder does not include a person who is in possession of a negotiable instrument that is payable to bearer. True False
False
Bill issues a negotiable promissory note to Paula, who indorses it in blank and delivers it to Allen. If Allen knows that the promissory note was given to Paula in exchange for worthless securities, Allen may still be a holder in due course. True False
False
Mary gives Joe $250 cash in return for Joe's indorsed check for $300. If Mary subsequently finds out that the check she took was given to Joe in return for a stolen car, Mary is no longer a holder in due course. True False
False
The "value" requirement of a holder in due course is the same as "consideration" for a contract. True False
False
The requirements for negotiation are the same for both order paper and bearer paper. True False
False
The shelter rule applies even if the transferee was a party to fraud or illegality affecting the instrument. True False
False
The shelter rule did not exist at common law. True False
False
To be a "holder," a party does not have to actually have the instrument in his possession. True False
False
Carol buys some items at the drugstore and writes a check to the store on her account at First Bank. Who is the drawee? Carol. The drugstore. First Bank. There is none.
First Bank.
Jay draws up a promissory note using permanent paint, payable to Nadine, on the side of a large, immovable boulder. Under the Uniform Commercial Code, the note is: a. Inconvenient, but legally valid b. Invalid, because of its impermanence c. Invalid, because of its lack of portability
Invalid, because of its lack of portability
To be negotiable, the instrument must satisfy all except which one of the following requirements? a. It must contain a promise or order to pay. b. It must be for a certain amount. c. It must be payable on demand. d. It must be signed.
It must be payable on demand.
To be negotiable, the instrument must satisfy all except which one of the following requirements? a. It must contain a promise or order to pay. b. It must be for a certain amount. c. It must be payable on demand. d. It must be signed.
It must be payable on demand.
All but which one of the following is required of a negotiable instrument? a. It must be payable only out of a particular fund. b. It must contain an unconditional promise or order to pay a fixed amount in money. c. It must be payable on demand or at a definite future date. d. It must be in writing and signed by the maker or drawer.
It must be payable only out of a particular fund.
To be negotiable, the instrument must satisfy all except which one of the following requirements? a. It must contain a promise or order to pay. b. It must be for a fixed amount. c. It must be written on paper. d. It must be signed
It must be written on paper.
Jeff writes a check drawn on his account at Capital City Bank to Tally Community College to pay his tuition. Jeff is the drawer. The college is the drawee. The bank is the payee. Jeff is the maker.
Jeff is the drawer.
Bill goes to First Bank to get a loan. He signs a note and agrees to repay the bank. What is the legal term for Bill's status regarding the note? a. Payee. b. Maker. c. Payor. d. Drawer.
Maker.
Which of the following will destroy negotiability? a. Making the instrument subject to the terms of another agreement. b. Making the instrument payable in German marks. c. Signing a check in pencil. d. Signing a check with an "X."
Making the instrument subject to the terms of another agreement.
Which of the following will destroy negotiability? a. Making the instrument subject to the terms of another agreement. b. Making the instrument payable in German marks. c. Signing a check in pencil. d. Signing a check with an "X."
Making the instrument subject to the terms of another agreement.
Lois takes her paycheck to Third National Bank for deposit at 6 p.m. on Wednesday. Third National Bank has until when to forward the check? a. Midnight Thursday b. Midnight Friday c. Close of business Friday d. Close of business Thursday
Midnight Friday
ABC Bank sent Joanne, a depositor, her January statement on January 31. Assuming ABC Bank exercises ordinary care in paying Joanne's checks, within what length of time will Joanne have to notify ABC bank of any instruments containing alterations or unauthorized signatures included in her January statement? Ten days. A reasonable period of time, not to exceed 30 days. 60 days. One year.
One year.
A definite time required for negotiability would NOT be satisfied in which instance? a. Payable on or before January 2, 2011. b. Payable one year from the completion of the building c. Payable one week after demand is made. d. Payable on June 15, 2010 or, if the building is not complete on that date, one year from that date.
Payable one year from the completion of the building
Which of the following is required to make an instrument negotiable? A. Stated date of issue. B. An indorsement by the payee. C. Stated location for payment. D. Payment only in legal tender.
Payment only in legal tender.
On April 2, 1989, Harris agreed to sell a computer to Cross for $390. At the time of delivery, Cross gave Harris $90 and a written instrument, signed by Cross, in which Cross promised to pay Harris the balance on April 20, 1989. The instrument also made a reference to the sale of the computer. Under the UCC Commercial Paper Article, the instrument is a A. Promissory note. B. Non-negotiable draft. C. Trade acceptance. D. Negotiable time draft.
Promissory note.
Which of the following is not a reason for the use of negotiable instruments? a. Reduction of the chance of forgery or material alteration b. Convenience c. Elimination of the risk of loss or theft of cash d. Reduction of cost to the federal government of maintaining an adequate supply of currency
Reduction of the chance of forgery or material alteration
For how long is a written stop payment order valid? One month. Six months. One year. Indefinitely, until the customer files another writing cancelling the order.
Six months.
"Pay to the order of Charles Chapman" is a special indorsement T/F
T
A blank indorsement converts order paper to bearer paper and leaves bearer paper as bearer paper T/F
T
A check indorsed "Pay to Manuel or bearer" may be negotiated by transfer of possession alone T/F
T
A check is made payable "to the order of Sam Johnson." If this check is indorsed by Sam Johnson and given to Alex, Alex becomes the holder of the instrument. T/F
T
Bearer paper is negotiable T/F
T
In 1992, Congress enacted the Truth in Savings Act. The Act requires all depositary banks to disclose in great detail to consumers the terms and conditions of their deposit accounts. T/F
T
It is not necessary that one own the instrument to be a "holder." T/F
T
Marie is the bookkeeper for the Buildco Construction. She makes out the payroll; prepares all of the payroll checks, and reconciles the bank statements for the firm. She decides to increase her income by padding the payroll; accordingly, she makes out checks in the names of several of her relatives. She then indorses and cashes the checks herself at First Bank where the company has its account. Buildco and not the bank will be liable for these checks. T/F
T
Sue makes a note payable to the order of Eric. Eric indorses it and delivers it to Henry, who gives Eric his indorsed paycheck in return. Henry is a "holder" of the note. T/F
T
The Code imposes certain affirmative duties on bank customers and fixes time limits within which they must assert their rights. T/F
T
The person who signs a note and promises to pay it is the maker T/F
T
The rules pertaining to "holder in due course" were instituted in order to encourage easy negotiability of commercial paper. T/F
T
The signature of an anomalous indorser has no effect on the manner in which the instrument may be negotiated T/F
T
The transfer of a negotiable instrument by a person other than the issuer in such a manner that the transferee becomes a holder is known as negotiation. T/F
T
The transfer of a nonnegotiable promise or order operates as an assignment T/F
T
To acquire the preferential rights of a holder in due course, a person must either meet the requirements of the Code or must "inherit" these rights under the shelter rule. T/F
T
To become a holder in due course the transferee must first be a holder. T/F
T
Under Revised Article 3, a check which meets all the requirements of being a negotiable instrument except that it is not payable to bearer or order is nevertheless a negotiable instrument T/F
T
Under the shelter rule, the transferee gets the rights of the transferor who is a holder in due course even if the transfer is not for value. T/F
T
Doug takes a $500 check drawn by Gail to Gail's drawee bank to cash it. Gail has over $10,000 on deposit in her account, but her bank refuses to pay Doug. Doug can sue the bank and demand payment. If the check is over 30 days old, the bank has a right to refuse payment. The bank has incurred a liability to Gail for its improper refusal to pay the check. All of the above.
The bank has incurred a liability to Gail for its improper refusal to pay the check.
Sergio gets a haircut from Amelia and writes a check to pay for it. In this transaction, the drawee is: a. Sergio, because he drew up the check to be charged to his account b. The bank on which the check is drawn, because it must pay the check c. Amelia, because the check is payable to her once it is presented at a bank d. No one in this situation
The bank on which the check is drawn, because it must pay the check
For an instrument to be negotiable, the Uniform Commercial Code (UCC) requires that it be signed by: a. The maker or the drawer b. The payee c. The promisee d. No one
The maker or the drawer
Ben Stewart has a checking account at First Bank. The relationship between Ben and his bank is based primarily on their contractual agreement. First Bank is a creditor and Ben is a debtor. Ben is an agent of First Bank. All of the above.
The relationship between Ben and his bank is based primarily on their contractual agreement.
An extension clause in a negotiable instrument is: a. Another term for an acceleration clause b. The reverse of an acceleration clause c. An addition to an instrument that renders it nonnegotiable d. A promise to pay in goods rather than money
The reverse of an acceleration clause
If a seller of goods is both the drawer and the payee of a draft, the drawer has created a: a. Bill of lading b. Promissory note c. Trade acceptance d. Check
Trade acceptance
A "holder" must be entitled to payment under the instrument. True False
True
A check is made payable "to the order of Cash." If this check is stolen from Frank, the thief becomes the holder of the check. True False
True
A holder must actually have the instrument in his possession. True False
True
A preauthorized fund transfer may be made from a consumer's account if the authorization is done in advance and in writing. True False
True
Bearer paper runs to whomever is in possession of it. True False
True
Carl owes Baker $100. Al impersonates Baker and receives a $100 check from Carl made payable to Baker. Al endorses the check by forging Baker's signature and cashes the check at a supermarket. Carl cannot require his bank to reaccredit his account for $100. True False
True
If an issuer is negligent, the doctrine of comparative negligence might apply if the negotiable instrument is wrongly paid. True False
True
Marco received his payroll check on Friday afternoon and immediately indorsed it by signing his name on the back. On his way home from work, he dropped an envelope containing the check. If Bonney finds the check, Bonney becomes the holder of the instrument. True False
True
Sue makes a note payable to the order of Eric. Eric indorses it and delivers it to Henry who gives Eric his indorsed paycheck in return. Henry is a "holder" of the note. True False
True
The defenses which may be asserted against a holder in due course are called real defenses.
True
The face of a promissory note contains the words, "Pay to the order of Jim Smith." A holder of this note, other than Jim Smith, must have possession of the instrument and the endorsement of Jim Smith True False
True
The impostor rule is an exception to the general rule that negotiation of any order instrument requires a valid indorsement by the person to whose order the instrument is payable. True False
True
The rules pertaining to "holder in due course" were instituted in order to encourage free transferability of negotiable instruments. True False
True
The transfer of a negotiable instrument is known as negotiation. True False
True
Which of the following would be a bearer instrument? a. A check payable to "cash." b. A check that says "pay to the order of John Jones." c. A check that says "pay to the order of bearer." d. Two of the above, (a) and (c).
Two of the above, (a) and (c).
Barry presents to Wake Bank for deposit in his account a check for $100 made out to him by Richard. Wake Bank provisionally credits Barry's account on Monday. When is payment final? Automatically at the end of the third business day. Midnight Tuesday. When Richard's bank receives the check. When the $100 has been collected from Richard's bank.
When the $100 has been collected from Richard's bank.
Elmore purchases goods from Grady, and Elmore executes and delivers a negotiable note to Grady for $1,200, payable to Grady's order in 30 days. Two weeks later, Grady negotiates the note to McDaniel. Which of the following is true? a. McDaniel is required to notify Elmore that he acquired the note. b. If the goods are defective, Elmore's defense will necessarily be available against McDaniel. c. Whether Elmore's defense is available against McDaniel will depend on whether McDaniel acquired the note in good faith and for value, had no knowledge of the defense, and took the note without reason to question its authenticity. d. McDaniel can acquire no greater rights than Grady had in the note.
Whether Elmore's defense is available against McDaniel will depend on whether McDaniel acquired the note in good faith and for value, had no knowledge of the defense, and took the note without reason to question its authenticity.
Would an instrument containing the following language be negotiable? "Harold T. Stone, as President, hereby promises to pay $12,348 to the order of Joe Jones Furniture for office equipment for Redtyn Corporation, payable from its corporate assets. (Signed) Harold T. Stone as President, Redtyn Corporation." a. No, because the promise refers to another contract. b. No, because its payment is limited to a particular fund. c. Yes, because Redtyn is a business entity. d. Yes, because it meets all the requirements of negotiability.
Yes, because it meets all the requirements of negotiability.
A draft is payable "to the order of Joe Jones or to bearer." Sally finds it and demands payment. Should the drawer pay Sally? a. No, unless Joe Jones's name is crossed off. b. No, unless "bearer" is handwritten. c. Yes, since the word "or" is contained in the instrument, either will do. d. No, the terminology is ambiguous and therefore must be paid only to the order of Joe Jones.
Yes, since the word "or" is contained in the instrument, either will do.
A substitute check: a. is basically a copy of the original check that shows both the front and back of the original check. b. is not suitable for automated processing in the same manner as the original but is used by the banks for storage of the information on an original check after processing. c. bears a legend stating that it is only a copy of a check and that it is not to be used in the same way as the original. d. All of the above.
a. is basically a copy of the original check that shows both the front and back of the original check.
The particular fund doctrine is: a. merely an instruction to pay the instrument. b. an undertaking to pay, which must be more than acknowledgment of an existing debt. c. more important under Revised Article 3 than under the prior Article 3. d. an order or promise to pay only out of a particular fund
an order or promise to pay only out of a particular fund
Under the Check 21 Act: a. banks must accept checks in electronic form. b. banks are permitted to truncate original checks and process check information electronically. c. banks must create substitute checks which are the legal equivalent of the original checks. d. All of the above.
banks are permitted to truncate original checks and process check information electronically.
Under the Check 21 Act: a. banks must accept checks in electronic form. b. banks are permitted to truncate original checks and process check information electronically. c. banks must create substitute checks which are the legal equivalent of the original checks. d. All of the above.
banks are permitted to truncate original checks and process check information electronically.
A draft drawn by a bank upon itself to the order of a named payee is a: a. trade acceptance. b. cashier's check. c. certificate of deposit. d. bank note.
cashier's check.
A ____________ is a specialized form of promise to pay money given by a maker in which the bank is the maker. note certificate of deposit trade acceptance cashier's check
certificate of deposit
An order to pay money drawn on a bank and payable on demand is a: check. trade acceptance. certificate of deposit. promissory note.
check.
An association of banks created for the purpose of settling accounts with each other on a daily basis is a: payor banking group. clearinghouse. provisional reserve. collecting intermediary.
clearinghouse.
Sylvia draws a check on ABC Bank payable "to the order of Ann Smith." Ann indorses it and deposits it in First Bank. Ann's bank is a: drawee bank. payee bank. collecting bank. payor bank.
collecting bank.
References to other agreements in negotiable instruments: a. destroy negotiability unless the recital makes the instrument subject to, or governed by, the terms of another agreement. b. do not destroy negotiability in any circumstances. c. do not destroy negotiability unless the recital makes the instrument subject to or governed by the terms of another agreement. d. None of the above.
do not destroy negotiability unless the recital makes the instrument subject to or governed by the terms of another agreement.
X signs a negotiable instrument ordering Y to pay Z the sum of $500. Y is the: drawee. maker. payee. drawer.
drawee.
By the concept of ____________, a transferee of a negotiable instrument can acquire greater rights than the transferor had. a. holder in due course b. assignment c. commercial utility d. sight drafts
holder in due course
Negotiable instruments: a. include drafts, promissory notes, assignments, and promissory notes. b. are used primarily for smaller transactions. c. in the form of checks have decreased in use since 1995. d. have increased in usage to the point where they are now approximately equal to usage of cash for payments
in the form of checks have decreased in use since 1995.
A teller's check: A. is a draft drawn by a bank on any other financial institutions other than a bank. B. is a check drawn by a bank on an individual's funds. C. is a draft on which the drawer or drawee are the same bank. D. is a draft drawn by a bank on another bank or payable at or through a bank.
is a draft drawn by a bank on another bank or payable at or through a bank.
Bill's car broke down on a dark, rainy night. Along came Andy in his service station's four-wheel drive truck with tools and supplies in the back. Bill didn't have any credit cards and only $3.25 cash, so Andy told him to write a check or an IOU. Neither Andy nor Bill had any paper, so Bill wrote on the cover of Andy's lunchbox: "If my car is fixed right by Andy Walcott, I will pay him $150. (Signed) Bill Boyd." Andy indorses the note and takes it to a commercial factor for negotiation. The factor refuses, saying it is non-negotiable because it: a. is written on a lunchbox. b. is conditional on satisfactory repair of the car. c. mentions the existence of a contract to repair the car. d. All of the above. e. None of the above.
is conditional on satisfactory repair of the car.
If an instrument satisfies the formal requirements of writing, signature, unconditional order to pay, and pay ability on demand: A. it is negotiable even though it is void or unenforceable for other reasons. B. it cannot be held by a holder in due course. C. validity of the instrument is automatically conferred. D. it is not negotiable if it is uncollectible for other reasons.
it is negotiable even though it is void or unenforceable for other reasons.
The term "money": means a medium of exchange authorized or adopted by a sovereign government as part of its currency. may mean gold or diamonds or any other commodity that is negotiable. does not necessitate governmental sanction. None of the above.
means a medium of exchange authorized or adopted by a sovereign government as part of its currency.
Legal tender or medium of exchange adopted or authorized by a sovereign government as part of its currency is known in the law of commercial paper as: a. the sum certain. b. consideration. c. value. d. money.
money.
A check written for a purchase in a store is a a. certified note. b. negotiable instrument. c. promise to pay. d. certificate of deposit.
negotiable instrument.
To be negotiable, a promissory note does NOT require that the a. note be a promise made orally. b. note be payable on demand or at a definite time. c. note be an unconditional promise to pay. d. note be in writing.
note be a promise made orally.
A certificate of deposit differs from a promissory note in that: the maker of a CD is always a bank. there are three parties to the transaction for a CD. the payee of a note must be paid on demand. Both (a) and (b).
the maker of a CD is always a bank.
A ____ is a form of time draft, which is frequently used as a credit device in a commercial transaction. a. trade acceptance b. cashier's check c. certificate of deposit d. bank note
trade acceptance
The court in Cooperative Centrale Raiffeisen-Boerenleenbank B.A. v. Bailey found: a. whether an instrument is negotiable is a question of fact. b. whether an instrument is negotiable is to be determined without reference to the intent of the parties. c. the wording of the note was unclear and therefore it did not fall within the UCC Article 3 requirements of negotiability. d. the question of whether the promissory note was negotiable had to be determined by questioning the parties to the transaction as to their intent.
whether an instrument is negotiable is to be determined without reference to the intent of the parties.
