Exam 23: Holder in Due Course and Transferability

Nonrestrictive indorsements contain instructions from the indorser.

A(n)________ is an instrument that is payable to a specific payee or indorsed to a specific indorsee.

If an instrument is payable jointly using the word "and, " both persons' indorsements are necessary to negotiate the instrument.

A holder in due course is subject to all the claims and defenses that can be asserted against the transferor.

If a virgule is used, both parties are necessary to negotiate the instrument.

A holder who takes an instrument with notice of its dishonor cannot qualify as an HDC.

________ are required to negotiate order paper, but they are not required to negotiate bearer paper.

Which of the following indorsements would be considered a nonrestrictive indorsement?

If there is no space for an indorsement on the instrument, a new instrument has to be made to accommodate the indorsement.

Which of the following is true of an indorsement to multiple persons using the virgule?

An instrument that is payable to a specific payee or indorsed to a specific indorsee is called a bearer paper.

An instrument that is refused payment when presented for payment is called a(n)________.

What happens if the name of the indorsee or payee is misspelled in an indorsement?

For an order paper to be negotiated there must be delivery and indorsement.

A(n)________ is an indorsement that has no instructions or conditions attached to the payment of the funds.

A restrictive indorsement can also be a bearer instrument.

A qualified indorsement protects subsequent indorsers from liability.

Which of the following requirements has to be met for a holder to qualify as an HDC under the shelter principle?

The transfer of rights under a nonnegotiable contract is known as an assignment.

Under which of the following UCC requirements is a holder considered a "holder in due process, " given that the holder performs the agreed-upon promise in a negotiable instrument?