Exam 13: Negotiable Instruments and Banks

In good faith,Clint gave Nora $600 for a negotiable promissory note made out to Nora for $650.She needed some money before the due date on the note,and Clint had no notice of outstanding claims or other defects of the note.Clint:

Which of the following regulates ATMs?

Al has authorized the payment of his cell phone bill through electronic fund transfer each month.In July,the bank's system malfunctions,preventing the usual transfer.Discuss the effect of the malfunction on Al's obligations.

On February 23,Ginny wrote a check for $436 to Framer Home Improvement as a deposit on some windows.When will the check be overdue? What is the effect of the check's being overdue? What is the effect if the check is stamped "Insufficient Funds" by Ginny's bank?

To complete some home repairs,Kenton purchases several power tools from Quality Plus by borrowing money from QP Sales Finance,an affiliate of Quality Plus.The promissory note Kenton signs:

On March 26,Janet wrote a $3,200 check to Legend Travel Agency.If the check is presented for payment the following January,should the bank pay the check? Explain the bank's obligations under these circumstances.

On December 4,Quentin signed a promissory note prepared by Landers Finance for $1,200.The preprinted form used by Landers stated the amount,plus interest,was due and payable in six months.On the line of the form that specified repayment terms,Landers had typed in that the note was due and payable by June 30 of the following year.How would this ambiguity be resolved?

Hammer bought a tool set from Weekend Projects,Inc.and signed a consumer credit contract promising to pay for the tool set in 12 monthly installments.Weekend promptly negotiated the instrument to its affiliate Easy Finance Co.in exchange for a discounted payment.Easy Finance gave value for the instrument,in good faith,and without knowledge of any defects or claims against the instrument.The tool set was defective and therefore Hammer stopped making the monthly payments.Easy Finance sues Hammer for the balance due on the instrument.Can Hammer raise the defense of breach of the implied warranty of merchantability against Easy Finance? Discuss.

Charlene has possession of a check made out to her order which she received in payment for writing a manuscript for her publisher.Charlene is a holder in due course and the publisher cannot claim any defenses to payment.Charlene has an unconditional right to be paid for the check.

Anthony purchased a $3800 promissory note from Sheila for the discounted amount of $3400.Anthony paid value in good faith and had no notice of any outstanding claims against this note that read,"Pay to the order of Sheila on March 2,2011,for the purchase of a 2005 Ford Taurus provided no major problems with the car arise prior to said payment date." Anthony is a holder in due course of a negotiable note.

If Fred writes a check that in figures shows $650 and in writing on the second line of the check states "eight hundred fifty," UCC rules would resolve the uncertainty to make the payment for $850.

The EFTA addresses all but which of the following kinds of errors?

A holder in due course:

A bank may continue to pay checks for 20 days after it learns of the death of its customer who wrote them unless it receives a stop payment order from someone claiming an interest in the account.

An instrument is negotiable if it satisfies six standards.Which of the following is a standard of negotiability?

The evening news reported that Emerson sold fraudulent negotiable instruments to investors around the country.Three days later McBride,who had not heard the news reports,bought some of the fraudulent negotiable instruments from a swindled investor.To be a holder in due course,McBride must:

There are two types of commercial paper: express and implied.

If a bank wrongfully dishonors an authorized check,the bank is:

Francenie has a checking account at Corner Bank.She wants tickets to an upcoming concert.She writes a check to Ticketmaster for the cost of two tickets.In this scenario:

Without notifying her bank,Sonya wrote a postdated check to the university for her tuition.Sonya's bank: