Question 1

Which of the following is not a negotiable instrument?

Accepted Answer

A)  A check 
B)  A draft 
C)  A certificate of deposit 
D)  A stock certificate 
A)  A check 
B)  A draft 
C)  A certificate of deposit 
D)  A stock certificate D

Question 2

Michael is the maker of a note which states that it will be due on March 10,2015.The note contains a clause stating that "payment will be limited to the proceeds of the sale of the contents of freight car No.1234." Is the note negotiable? Why or why not? Explain.

Accepted Answer

No,because it does not include a "fixed amount" (amount that is ascertainable from the instrument itself without reference to an outside source).To be negotiable,the person entitled to enforce the instrument must be able to determine from the instrument itself the amount he is entitled to receive.

Question 3

Which of the following would not be considered "money" within the meaning of the Code?

Accepted Answer

A)  Diamonds 
B)  Mexican pesos 
C)  Swiss francs 
D)  Nigerian naira 
A)  Diamonds 
B)  Mexican pesos 
C)  Swiss francs 
D)  Nigerian naira A

Question 4

The Code section which sets forth the requirements that must be met for an instrument to be negotiable is:

Accepted Answer

A)  2-209. 
B)  3-104. 
C)  4-405. 
D)  3-250. 
A)  2-209. 
B)  3-104. 
C)  4-405. 
D)  3-250.

Question 5

Which of the following will destroy negotiability?

Accepted Answer

A)  Leaving the name of the payee off a check 
B)  Making the check payable in British pounds 
C)  Signing a check with an "X" 
D)  Postdating the check 
A)  Leaving the name of the payee off a check 
B)  Making the check payable in British pounds 
C)  Signing a check with an "X" 
D)  Postdating the check

Question 6

Which of the following will destroy negotiability?

Accepted Answer

A)  Antedating a check 
B)  Making the right to payment subject to the terms of another agreement 
C)  Marking a check payable only out of the proceeds of a particular sale 
D)  Writing a check on notebook paper 
A)  Antedating a check 
B)  Making the right to payment subject to the terms of another agreement 
C)  Marking a check payable only out of the proceeds of a particular sale 
D)  Writing a check on notebook paper

Question 7

Negotiability is wholly a matter of form.

Accepted Answer

A) True 
 B)False

Question 8

An instrument which is ambiguous as to whether it is a draft or note,such as,"To Alma: On demand I promise to pay $200 to the order of Brittany.Signed,Christopher" must be treated as a note and be presented to Christopher for payment.

Accepted Answer

A) True 
 B)False

Question 9

What are the requirements of negotiability under the Code? List and briefly summarize them.

Accepted Answer

(1)Be in writing-printing,handwriting,ty

Question 10

Which of the following is correct with respect to negotiability?

Accepted Answer

A)  The writing requirement means that a check must be written on paper. 
B)  An order or promise to pay only out of a particular fund is permissible under Revised Article 3. 
C)  Money must be in U.S.dollars. 
D)  A negotiable instrument must be payable at a definite time. 
A)  The writing requirement means that a check must be written on paper. 
B)  An order or promise to pay only out of a particular fund is permissible under Revised Article 3. 
C)  Money must be in U.S.dollars. 
D)  A negotiable instrument must be payable at a definite time.

Question 11

Paper payable "on demand" fails the test of negotiability in that it does not contain a specific time.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is correct with respect to the fixed amount requirement of negotiability under Revised Article 3?

Accepted Answer

A)  The fixed amount requirement applies only to the principal. 
B)  Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates. 
C)  A sum certain may be payable in installments or with a fixed discount if paid before maturity. 
D)  All of these are correct. 
A)  The fixed amount requirement applies only to the principal. 
B)  Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates. 
C)  A sum certain may be payable in installments or with a fixed discount if paid before maturity. 
D)  All of these are correct.

Question 13

An instrument paying a fixed amount in British pounds is not negotiable because the instrument must be payable in money authorized or adopted by the U.S.as part of its currency.

Accepted Answer

A) True 
 B)False

Question 14

A form of time draft known as a trade acceptance is used as a credit device in commercial transactions.

Accepted Answer

A) True 
 B)False

Question 15

To be negotiable,an instrument must be in writing.

Accepted Answer

A) True 
 B)False

Question 16

A substitute check created under Check 21 is the legal equivalent of the original check and contains all the information contained on the original check.

Accepted Answer

A) True 
 B)False

Question 17

Notes and certificates of deposit are orders to pay money to a third person.

Accepted Answer

A) True 
 B)False

Question 18

A written and signed promise by Miller to Baker to deliver 1,000 pounds of flour in 30 days is an example of a negotiable instrument.

Accepted Answer

A) True 
 B)False

Question 19

A reference to another writing makes a promise or order conditional.

Accepted Answer

A) True 
 B)False

Question 20

An "I.O.U." is not considered a negotiable instrument.

Accepted Answer

A) True 
 B)False

Exam 26: Form and Content

Which of the following is not a negotiable instrument?

Michael is the maker of a note which states that it will be due on March 10,2015.The note contains a clause stating that "payment will be limited to the proceeds of the sale of the contents of freight car No.1234." Is the note negotiable? Why or why not? Explain.

Which of the following would not be considered "money" within the meaning of the Code?

The Code section which sets forth the requirements that must be met for an instrument to be negotiable is:

Which of the following will destroy negotiability?

Which of the following will destroy negotiability?

Negotiability is wholly a matter of form.

An instrument which is ambiguous as to whether it is a draft or note,such as,"To Alma: On demand I promise to pay $200 to the order of Brittany.Signed,Christopher" must be treated as a note and be presented to Christopher for payment.

What are the requirements of negotiability under the Code? List and briefly summarize them.

Which of the following is correct with respect to negotiability?

Paper payable "on demand" fails the test of negotiability in that it does not contain a specific time.

Which of the following is correct with respect to the fixed amount requirement of negotiability under Revised Article 3?

An instrument paying a fixed amount in British pounds is not negotiable because the instrument must be payable in money authorized or adopted by the U.S.as part of its currency.

A form of time draft known as a trade acceptance is used as a credit device in commercial transactions.

To be negotiable,an instrument must be in writing.

A substitute check created under Check 21 is the legal equivalent of the original check and contains all the information contained on the original check.

Notes and certificates of deposit are orders to pay money to a third person.

A written and signed promise by Miller to Baker to deliver 1,000 pounds of flour in 30 days is an example of a negotiable instrument.

A reference to another writing makes a promise or order conditional.

An "I.O.U." is not considered a negotiable instrument.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

A: Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance,breach,and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits,collections,and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature,formation,and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection Double

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property,property Insurance,bailments,and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

Legal Terminology: Understanding Criminal and Civil Law Systems

Contract Law Terminology

Exploring the Legal Concepts of Agency and Fiduciary Duty

Understanding Key Legal Concepts in Sales and Contracts

Understanding the Terminology of Banking and Finance: Key Concepts and Definitions

Exploring Legal Concepts and Processes in Business Partnerships

Understanding Corporate Law: A Guide to Ultra Vires Acts, Subscribers, Debt Securities, and More

Understanding Key Terms in Secured Transactions and Bankruptcy Law

Legal Topics and Terms