Exam 28: Transfers of Negotiable Instruments and Warranties of Parties

The transferee has only those rights that were possessed by the transferor of the note when a transfer of an instrument is made by:

A payee whose name is misspelled may indorse with the wrong name,the correct name,or both.

Industries Inc.,drew a check payable to Gloria Schell and Pippen Tallit in the sum of $20,000.For a proper negotiation,the check:

The transfer and collection of negotiable instruments between banks requires specific indorsements.

When a special indorsement is made,the instrument continues to be order paper and may be negotiated only by an indorsement and delivery.

An indorsement "for deposit only" is:

A transferor may be able to set aside a negotiation obtained by fraud or duress unless:

If an instrument is drawn in favor of a named officer of a corporation,the instrument is payable only to that officer..

The impostor rule is an exception to the rules on liability for forgery that covers certain situations,such as the embezzling payroll clerk.

In the case of a check,when the impostor rule applies:

If a lost negotiable instrument is in bearer form at the time of the loss,the finder is entitled to enforce payment.

An unqualified indorser who receives consideration for the indorsement impliedly warrants all of the following except:

Indorsements may be classified in terms of whether the indorser has added any words to the indorsement and what those words are.

Order paper is converted into bearer paper by the holder's blank indorsement.

A blank indorsement turns a(n)__________instrument into a(n)__________ instrument.

If an instrument is payable to bearer,it can be negotiated by transfer of possession alone.

When the name of the payee is spelled incorrectly,the payee:

A qualified indorsement qualifies the effect of a blank or special indorsement by disclaiming certain liabilities of the indorser to a maker or drawee.

When a negotiable instrument is transferred by negotiation,the transferee becomes a holder in due course.

Order paper is negotiated by the indorsement of the holder only.