Question 1

To be a holder in due course, a person must take an instrument

Accepted Answer

A)  before its due date. 
B)  the day after its due date. 
C)  thirty days after its due date. 
D)  ten days after its due date. 
A)  before its due date. 
B)  the day after its due date. 
C)  thirty days after its due date. 
D)  ten days after its due date.

Question 2

If payment of a negotiable instrument is refused, it is said to be ____________________.

Accepted Answer

The answer of If payment of a negotiable instrument is...

Question 3

The Federal Trade Commission has enacted a federal regulation that prohibits the holder in due course concept from being used against consumers.

Accepted Answer

A) True 
 B)False

Question 4

Parties to a negotiable instrument who have liability for payment of the instrument are classified as either primary parties or secondary parties. Distinguish between primary parties and secondary parties.

Accepted Answer

Primary parties are those who

Question 5

The amount of a promissory note was changed from $750 to $7,500 by the payee. The maker can be held liable for

Accepted Answer

A)  $750. 
B)  $7,500. 
C)  $6,750. 
D)  nothing. 
A)  $750. 
B)  $7,500. 
C)  $6,750. 
D)  nothing.

Question 6

To qualify as a holder in due course, the holder must take the instrument

Accepted Answer

A)  for value. 
B)  in good faith. 
C)  without knowledge that the paper might be overdue. 
D)  under all of the circumstances stated above. 
A)  for value. 
B)  in good faith. 
C)  without knowledge that the paper might be overdue. 
D)  under all of the circumstances stated above.

Question 7

Presentment of a note is

Accepted Answer

A)  a demand for payment. 
B)  required to be made on or before the due date. 
C)  able to be done by mail, in person, or through a bank. 
D)  all of these. 
A)  a demand for payment. 
B)  required to be made on or before the due date. 
C)  able to be done by mail, in person, or through a bank. 
D)  all of these.

Question 8

What are the three requirements for a holder to become a holder in due course?

Accepted Answer

To quality as a holder in due course, yo

Question 9

Nonnegotiable instruments are subject to the rules of ordinary contracts and can be transferred by assignment.

Accepted Answer

A) True 
 B)False

Question 10

Duress as a legal reason (defense) offered by a primary or secondary party for not paying a holder the amount due on an instrument is

Accepted Answer

A)  sometimes a personal defense. 
B)  sometimes a real defense. 
C)  generally no defense at all. 
D)  sometimes a personal defense and sometimes a real defense. 
A)  sometimes a personal defense. 
B)  sometimes a real defense. 
C)  generally no defense at all. 
D)  sometimes a personal defense and sometimes a real defense.

Question 11

Under the provisions of the UCC, in order to hold the drawer liable, an uncertified check must be presented for payment within a maximum of

Accepted Answer

A)  seven days. 
B)  twenty days. 
C)  thirty days. 
D)  sixty days. 
A)  seven days. 
B)  twenty days. 
C)  thirty days. 
D)  sixty days.

Question 12

A person who signs a negotiable instrument in an unauthorized manner is subject to ____________________ liability.

Accepted Answer

The answer of A person who signs a negotiable instrument...

Question 13

If the amount on an instrument is altered, a holder in due course can enforce the instrument for the original amount.

Accepted Answer

A) True 
 B)False

Question 14

One who is first obligated to pay a negotiable instrument is called a(n) ____________________ party.

Accepted Answer

The answer of One who is first obligated to pay...

Question 15

The maker of a promissory note is considered to be a primary party.

Accepted Answer

A) True 
 B)False

Question 16

The holder of a promissory note fails to present the note to the maker for payment on the date on which it is due. What effect does this have on the liability for payment?

Accepted Answer

A)  It requires court action in order to make the holder liable for payment. 
B)  It requires court action in order to hold previous indorsers liable for payment. 
C)  It releases the maker from liability for payment. 
D)  It releases indorsers from liability for payment. 
A)  It requires court action in order to make the holder liable for payment. 
B)  It requires court action in order to hold previous indorsers liable for payment. 
C)  It releases the maker from liability for payment. 
D)  It releases indorsers from liability for payment.

Question 17

After accepting a draft, the drawee is known as the ____________________.

Accepted Answer

The answer of After accepting a draft, the drawee is...

Question 18

Notice of dishonor must be given by a holder of a negotiable instrument to a secondary party within ____________________ business days after dishonor by the primary party.

Accepted Answer

The answer of Notice of dishonor must be given by...

Question 19

Notice of the dishonor of a negotiable instrument

Accepted Answer

A)  must be in writing. 
B)  is necessary to hold a secondary party liable. 
C)  must be given within ten days. 
D)  is given to the first indorser first. 
A)  must be in writing. 
B)  is necessary to hold a secondary party liable. 
C)  must be given within ten days. 
D)  is given to the first indorser first.

Question 20

A(n) ____________________ is a legal reason offered by a primary or secondary party for not paying a holder the amount due on a negotiable instrument.

Accepted Answer

The answer of A(n) ____________________ is a legal reason offered...

Exam 21: Rights and Duties of Parties

To be a holder in due course, a person must take an instrument

If payment of a negotiable instrument is refused, it is said to be ____________________.

The Federal Trade Commission has enacted a federal regulation that prohibits the holder in due course concept from being used against consumers.

Parties to a negotiable instrument who have liability for payment of the instrument are classified as either primary parties or secondary parties. Distinguish between primary parties and secondary parties.

The amount of a promissory note was changed from $750 to $7,500 by the payee. The maker can be held liable for

To qualify as a holder in due course, the holder must take the instrument

Presentment of a note is

What are the three requirements for a holder to become a holder in due course?

Nonnegotiable instruments are subject to the rules of ordinary contracts and can be transferred by assignment.

Duress as a legal reason (defense) offered by a primary or secondary party for not paying a holder the amount due on an instrument is

Under the provisions of the UCC, in order to hold the drawer liable, an uncertified check must be presented for payment within a maximum of

A person who signs a negotiable instrument in an unauthorized manner is subject to ____________________ liability.

If the amount on an instrument is altered, a holder in due course can enforce the instrument for the original amount.

One who is first obligated to pay a negotiable instrument is called a(n) ____________________ party.

The maker of a promissory note is considered to be a primary party.

The holder of a promissory note fails to present the note to the maker for payment on the date on which it is due. What effect does this have on the liability for payment?

After accepting a draft, the drawee is known as the ____________________.

Notice of dishonor must be given by a holder of a negotiable instrument to a secondary party within ____________________ business days after dishonor by the primary party.

Notice of the dishonor of a negotiable instrument

A(n) ____________________ is a legal reason offered by a primary or secondary party for not paying a holder the amount due on a negotiable instrument.

Foundations of Law and the Role of Ethics in Business

The Legal System in the United States and Its Constitutional Foundation

Personal, Business, and Cyber Crimes and the American Criminal Justice System

Tort Law: Traditional Torts and Cyber Torts

Litigation and Alternatives for Settling Civil Disputes

Contract Law: a Beginning

Agreement: Offer and Acceptance

Consideration

Capacity

Legality

Memorialize Contracts in Writingstatute of Frauds

Transfer of Contract Rights and Duties

The Termination of Contracts: Discharge

The Termination of Contracts: Breach of Contract

Formation of Sales and Lease Contracts

The Sales Contract: Transfer of Title and Risk of Loss

The Sales Contract: Performance, Breach, and Remedies for Breach

Product Liability Law

Nature and Types of Negotiable Instruments

Issue, Transfer, Indorsement, and Discharge of Negotiable Instruments

Checks and the Banking System in the Twenty-First Century

Employer-Employee Relationship

Principal-Agent Relationship

Principal-Agent, Employer-Employee, and Third-Party Relationships

Sole Proprietorships, Partnerships, and Limited Liability Organizations

Corporations and Franchising

Government Regulation of Business

Basic Legal Concepts of Property

Renting Real Property

Buying and Selling Real Property

Nature and Types of Bailments

Wills, Intestacy, and Estate Planning

Protecting the Consumer and the Taxpayer

Protecting the Borrower

Protecting the Creditor

Property, Casualty and Automobile Insurance

Personal Insurance

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