Exam 27: Negotiation, Holder in Due Course, and Defenses

[House Painting] Graciela Reyes signed a check agreeing to pay, "Annie Greene, Marney Harris," $1,000. The payment was for painting her house. A problem with the note was that it spelled Annie's last name, "Greene," whereas Annie spells it simply, "Green." Annie and Marney were having a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the check on the back, "Annie Green," and presented it to Hiro Murakami to satisfy a debt that she owed him. Hiro Murakami endorsed the check on the back, "Hiro Murakami, without recourse," and gave it to his nephew, Nate, who took it to the bank for payment. Meanwhile, Graciela has stopped payment on the check because, following a rainstorm, all the paint on the house looked spotted. Marney is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and also because she, Marney, did not sign it. -What is the effect of the designation, "Hiro Murakami, without recourse?"

A(n) ________ is the person receiving an endorsement.

[House Painting] Graciela Reyes signed a check agreeing to pay, "Annie Greene, Marney Harris," $1,000. The payment was for painting her house. A problem with the note was that it spelled Annie's last name, "Greene," whereas Annie spells it simply, "Green." Annie and Marney were having a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the check on the back, "Annie Green," and presented it to Hiro Murakami to satisfy a debt that she owed him. Hiro Murakami endorsed the check on the back, "Hiro Murakami, without recourse," and gave it to his nephew, Nate, who took it to the bank for payment. Meanwhile, Graciela has stopped payment on the check because, following a rainstorm, all the paint on the house looked spotted. Marney is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and also because she, Marney, did not sign it. -Which statement is true regarding the status of Nate?

In order to be negotiated, ________ must be endorsed as well as delivered.

Which of the following is the term for a person creating an endorsement?

Which of the following is a version of a qualified endorsement?

Which of the following may endorse an instrument made payable to a legal entity such as a partnership?

When an instrument is payable to joint payees, the endorsement only needs to be by the first payee.

A bank has given value for a negotiable instrument to the extent that the bank has a security interest in the instrument.

Which of the following does the UCC define as, "honesty in fact and the observance of reasonable commercial standards of fair dealing?"

Breach of contract is a(n) ________ defense that an HDC may not be subject to.

Which of the following is the result if a payee who receives an instrument with missing information completes the missing information in a way that is inconsistent with the intent of issuer, and the instrument has been clearly materially altered?

Kostas is sending his brother-in-law and agent, Ben, who he does not particularly trust, to deposit a check belonging to Kostas into Kostas's business bank account. What is the best way for Kostas to endorse the check to attempt to limit any misappropriation?

Allison worked for ABC Company as the company treasurer. She took 20 of ABC Company's checks, labeled as belonging to ABC Company. Over the course of one year, she signed and mailed the checks to American Express, her own credit card company, to pay her personal credit card debt. Assuming the court follows Watson Coatings Inc., v. American Express Travel Services Inc., the case in the text, which of the following is the most likely result in a lawsuit by ABC Company against American Express to recover the amounts of the checks?

Talon has a check that is written out to him from his aunt for a graduation gift. This type of instrument is known as a(n) ________.

According to the UCC, which of the following is true regarding when a person has notice of a fact?

[House Painting] Graciela Reyes signed a check agreeing to pay, "Annie Greene, Marney Harris," $1,000. The payment was for painting her house. A problem with the note was that it spelled Annie's last name, "Greene," whereas Annie spells it simply, "Green." Annie and Marney were having a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the check on the back, "Annie Green," and presented it to Hiro Murakami to satisfy a debt that she owed him. Hiro Murakami endorsed the check on the back, "Hiro Murakami, without recourse," and gave it to his nephew, Nate, who took it to the bank for payment. Meanwhile, Graciela has stopped payment on the check because, following a rainstorm, all the paint on the house looked spotted. Marney is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and also because she, Marney, did not sign it. -Which of the following is true regarding the complaint of Marney that she did not also endorse the instrument?

Which of the following was the result in the Case Opener, involving the check taken in good faith by a market, later returned to the market based on a stop payment order, and purchased from the market by the plaintiff who sued Cigna, the issuer of the check?

One who possesses a cashier's check payable to someone else is not a(n) ________ even though his name appears on it.

Once an instrument is negotiable, it remains negotiable.