Exam 26: Form and Content

Joel's car broke down on a dark, rainy night. Along came Andy in his four-wheel drive truck with tools and supplies in the back. Joel didn't have any credit cards and had only $3.25 cash, so Andy told him to write a check or an IOU. Neither Andy nor Joel had any paper, so Joel wrote on the cover of Andy's lunchbox: "If my car is fixed right by Andy Walcott, I will pay him $150. (Signed) Joel Boyd." Andy indorses the note and takes it to a commercial factor for negotiation. The factor refuses, saying it is non-negotiable because:

A check is a draft payable on demand.

A maker must sign in the lower, right-hand corner of the instrument.

To be negotiable, the instrument must satisfy all except which one of the following requirements?

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

Which of the following would NOT be negotiable? Explain. a. A check with the name of the payee omitted. b. A draft for 3,000 bushels of corn. c. A check written in pencil on a paper towel. d. A note stating that it is secured by a mortgage on a specified parcel of land. e. A note stating "IOU fifty dollars."

Which article of the UCC deals with "negotiable instruments"?

Which of the following is correct with respect to negotiability?

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

A certificate of deposit differs from a promissory note in that, with a certificate of deposit:

Identify the parties to checks and notes.

Which of the following is not true?

To be negotiable, an instrument must be in writing.

Bearer paper is negotiable.

Which of the following would be a bearer instrument?

Under the law of assignments, the assignee stands in the shoes of the assignor.

All but which of the following is required of a negotiable instrument?

An instrument payable at a fixed time subject to acceleration by the holder is not negotiable.

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