Exam 27: Transfer and Holder in Due Course

Assuming a note made by Barbara payable to Carol, which indorsement will limit negotiability?

The requirements for negotiation are the same for both order paper and bearer paper.

Clint induces David, by fraud in the inducement, to make an instrument payable to the order of Clint. Clint then negotiates the instrument to Eric, a holder in due course, and later reacquires it from Eric. In this case:

It is necessary that one own the instrument to be a "holder."

Which of the following is required regarding indorsements?

Alexander Schwing indorses his check with his own name and the words "for deposit only." What type of indorsement is this?

Defenses that may be asserted against a holder in due course are called:

Is the negotiation of an instrument ever valid even though the transaction in which it occurs is voidable or even void? Explain.

Bearer paper runs to whomever is in possession of it.

A holder in due course has the same rights under a consumer credit contract as under the UCC as long as a special notice requirement has been met.

What is the difference between time paper and demand paper? When is each type overdue?

The shelter rule applies even if the transferee was a party to fraud or illegality affecting the instrument.

A holder in due course would have the right to collect from the original maker of an instrument even if the maker had a valid personal defense.

Fraud in the execution of an instrument is a real defense which can be used against a holder in due course.

The customary manner of disclaiming the indorser's contractual liability is to add which of the following sets of words before or after his signature?

What is the effect of an alteration on a negotiable instrument? Does it make a difference whether the alteration was made fraudulently?

The Code provides that for checks, a reasonable time for demand for payment is sixty days, after which a purchaser should be on notice the paper is overdue for the purpose of becoming a holder in due course.

Alice Jones receives a bonus of $500 from her boss. She needs cash for her vacation, so she indorses the check to Charlie who gives her $300 cash and an IOU for $200. When Charlie presents the check to Alice's company for payment, her boss says the check was meant for Alex Jones instead; it was all a big mistake. What will Charlie be able to collect from the company?

Delivery alone is insufficient to negotiate an instrument when it is payable to:

Art signs a promissory note payable to the order of Swains Jewelers for $8,000 for a wedding ring. If the owner of Swains simply signs "Swains Jewelers":