Exam 20: Creation and Transfer of Negotiable Instruments

The drawee is also called the acceptor of the draft.

The maker or drawer of an instrument is considered liable even if there is no signature on the instrument.

A security that is posted for the repayment of a promissory note is known as a(n)________.

A separate piece of paper in which an indorsement is written when there is no room in an instrument is known as a(n)________.

An instrument that contains an unconditional order to pay is considered as a negotiable instrument.

Ryan executes a promissory note promising to pay Ruth the money that he owes her.He does not specify the amount that he will repay.Is the promissory note valid? Discuss other requirements that a negotiable instrument must fulfill in order to be negotiable as per UCC 3-104(a).

An unconditional promise to pay a definite amount makes an instrument nonnegotiable.

________ is a legitimate method to convert an order paper to a bearer paper.

While indorsing a check,if an indorser indorses it just by signing the name,what type of indorsement would that be? How does this type of indorsement differ from a special indorsement?

The holder of an instrument wants the instrument to be paid to a specific person,ensure that the amount mentioned on the instrument is deposited in that person's account.The holder does not want to be liable to that person in the event that the instrument is not paid.In this scenario,the holder should most likely execute a ________.

Typewritten,handwritten,or other tangible agreements fulfill the writing requirement of a negotiable instrument.

________ of the UCC establishes rules for the creation of,transfer of,enforcement of,and liability on negotiable instruments.

A check is a promise to pay.

An instrument that is not payable to a specific payee or indorsee is known as a(n)________.

If a trader draws a check for the goods purchased,what purpose does the check serve? Are there any other functions of a negotiable instrument?

The portability requirement is intended to ensure free transfer of an instrument.

A negotiable instrument is subject to normal contract law.

An indorsement that contains the signature of an indorser and specifies a person to whom the indorser intends the instrument to be payable is known as a(n)________.

A(n)________ is a signature and other directions written by or on behalf of the holder somewhere on an instrument.

A special form of note created when a person deposits money at a financial institution in exchange for the institution's promise to pay back the amount of the deposit plus an agreed-upon rate of interest upon the expiration of a set time period agreed upon by the parties is known as a ________.