Question 1

Which of the following will destroy negotiability?

Accepted Answer

A)  Antedating a check 
B)  Making the right to payment subject to the terms of another agreement 
C)  Marking a check payable only out of the proceeds of a particular sale 
D)  Writing a check on notebook paper 
A)  Antedating a check 
B)  Making the right to payment subject to the terms of another agreement 
C)  Marking a check payable only out of the proceeds of a particular sale 
D)  Writing a check on notebook paper

Question 2

Where both words and numerals are used to describe the amount payable, the numerals will be used to resolve any differences.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a reason for the use of negotiable instruments?

Accepted Answer

A)  Reduction of the chance of forgery or material alteration 
B)  Convenience 
C)  Elimination of the risk of loss or theft of cash 
D)  Reduction of cost to the federal government of maintaining an adequate supply of currency 
A)  Reduction of the chance of forgery or material alteration 
B)  Convenience 
C)  Elimination of the risk of loss or theft of cash 
D)  Reduction of cost to the federal government of maintaining an adequate supply of currency

Question 4

Postdating an instrument will destroy its negotiability.

Accepted Answer

A) True 
 B)False

Question 5

Negotiability invests commercial paper with a high degree of marketability and commercial utility by allowing it to be freely transferable and enforceable by a holder in due course.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a negotiable instrument?

Accepted Answer

A)  A check 
B)  A draft 
C)  A certificate of deposit 
D)  A stock certificate 
A)  A check 
B)  A draft 
C)  A certificate of deposit 
D)  A stock certificate

Question 7

Time paper is payable at a definite time.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is correct with respect to the fixed amount requirement of negotiability under Revised Article 3?

Accepted Answer

A)  The fixed amount requirement applies only to the principal. 
B)  Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates. 
C)  A sum certain may be payable in installments or with a fixed discount if paid before maturity. 
D)  All of these are correct. 
A)  The fixed amount requirement applies only to the principal. 
B)  Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates. 
C)  A sum certain may be payable in installments or with a fixed discount if paid before maturity. 
D)  All of these are correct.

Question 9

A draft is payable "to the order of Joe Jones or to bearer." Sally finds it and demands payment. Should the drawer pay Sally?

Accepted Answer

A)  No, unless Joe Jones' name is crossed off 
B)  No, unless "bearer" is handwritten 
C)  Yes, an instrument made payable both to order and to bearer is payable to bearer 
D)  Yes, since the instrument is ambiguous, Joe Jones has no right to payment and only the bearer has the right to demand payment 
A)  No, unless Joe Jones' name is crossed off 
B)  No, unless "bearer" is handwritten 
C)  Yes, an instrument made payable both to order and to bearer is payable to bearer 
D)  Yes, since the instrument is ambiguous, Joe Jones has no right to payment and only the bearer has the right to demand payment

Exam 26: Form and Content

Which of the following will destroy negotiability?

Where both words and numerals are used to describe the amount payable, the numerals will be used to resolve any differences.

Which of the following is not a reason for the use of negotiable instruments?

Postdating an instrument will destroy its negotiability.

Negotiability invests commercial paper with a high degree of marketability and commercial utility by allowing it to be freely transferable and enforceable by a holder in due course.

Which of the following is not a negotiable instrument?

Time paper is payable at a definite time.

Which of the following is correct with respect to the fixed amount requirement of negotiability under Revised Article 3?

A draft is payable "to the order of Joe Jones or to bearer." Sally finds it and demands payment. Should the drawer pay Sally?

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

the Legal Environment of Business

Contracts

Agency

Sales

Negotiable Instruments

Unincorporated Business Associations

Corporations

Debtor and Creditor Relations

Regulation of Business

Property

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