Question 1

Which of the following is false regarding the UCC's signature requirement for a negotiable instrument?

Accepted Answer

A)  The signature may be an assumed name. 
B)  A signature may be made by means of a device or machine. 
C)  A signature may be made manually. 
D)  The signature of an agent on behalf of the principal binds the principal and satisfies the signature requirement. 
E)  The UCC prohibits an X from being used as a signature. 
A)  The signature may be an assumed name. 
B)  A signature may be made by means of a device or machine. 
C)  A signature may be made manually. 
D)  The signature of an agent on behalf of the principal binds the principal and satisfies the signature requirement. 
E)  The UCC prohibits an X from being used as a signature.

Question 2

A negotiable instrument is a written document containing the signature of the creator that makes an unconditional promise or order to pay a sum certain of money ________.

Accepted Answer

A)  to a third party vendor 
B)  at either a time certain or on demand 
C)  as a promissory agreement 
D)  to a bank 
E)  to a guarantor 
A)  to a third party vendor 
B)  at either a time certain or on demand 
C)  as a promissory agreement 
D)  to a bank 
E)  to a guarantor

Question 3

What is the effect of Hye agreeing to give Sam a DVD in return for the book?

Accepted Answer

A)  Hye and Sam have an enforceable contract, and Hye has also satisfied the negotiability condition regarding the form of payment. 
B)  Hye and Sam have an enforceable contract, but the agreement fails to satisfy the negotiability requirement that payment be in a sum certain in money. 
C)  Because payment is not in a sum certain for money, Hye and Sam do not have an enforceable contract nor does the agreement satisfy the negotiability requirement that payment be in a sum certain in money. 
D)  Because payment is not in a sum certain for money, Hye and Sam do not have an enforceable contract, but the requirement of negotiability regarding the form of payment has been satisfied. 
E)  Unless Sam acknowledges in writing that the fair market value of the DVD is equivalent to the value of the book he provided to Hye, there is no enforceable contract nor is the agreement negotiable. 
A)  Hye and Sam have an enforceable contract, and Hye has also satisfied the negotiability condition regarding the form of payment. 
B)  Hye and Sam have an enforceable contract, but the agreement fails to satisfy the negotiability requirement that payment be in a sum certain in money. 
C)  Because payment is not in a sum certain for money, Hye and Sam do not have an enforceable contract nor does the agreement satisfy the negotiability requirement that payment be in a sum certain in money. 
D)  Because payment is not in a sum certain for money, Hye and Sam do not have an enforceable contract, but the requirement of negotiability regarding the form of payment has been satisfied. 
E)  Unless Sam acknowledges in writing that the fair market value of the DVD is equivalent to the value of the book he provided to Hye, there is no enforceable contract nor is the agreement negotiable.

Question 4

________ is the original generic term for the documents used as payments to facilitate commercial transactions.

Accepted Answer

A)  Negotiable instrument 
B)  Commercial paper 
C)  Promissory paper 
D)  Commerce note 
E)  Payment note 
A)  Negotiable instrument 
B)  Commercial paper 
C)  Promissory paper 
D)  Commerce note 
E)  Payment note

Question 5

When a specific payee is named, the document is a(n) ________ instrument.

Accepted Answer

A)  demand 
B)  order 
C)  transitional 
D)  notified 
E)  receiver 
A)  demand 
B)  order 
C)  transitional 
D)  notified 
E)  receiver

Question 6

[Auto Repair] Sam writes a check from his checking account with Banking International to pay Auto Repair for service work it performed on his vehicle.
-Under the UCC, what role does Banking International hold?

Accepted Answer

A)  Drawee 
B)  Drawer 
C)  Owner 
D)  Payee 
E)  Payor 
A)  Drawee 
B)  Drawer 
C)  Owner 
D)  Payee 
E)  Payor

Question 7

List the seven requirements for an instrument to be negotiable.

Accepted Answer

The seven requirements for an instrument

Question 8

Which statement is true regarding negotiation of an instrument?

Accepted Answer

A)  Negotiation of both an order instrument and bearer instrument is by delivery alone. 
B)  Negotiation of both an order instrument and bearer instrument require endorsement plus delivery. 
C)  Negotiation of an order instrument is by endorsement plus delivery, while negotiation of a bearer instrument is by delivery alone. 
D)  Negotiation of a bearer instrument is by endorsement plus delivery, while negotiation of an order instrument is by delivery alone. 
E)  Negotiation of both an order instrument and a bearer instrument requires both delivery and an additional three days to allow for bank clearance. 
A)  Negotiation of both an order instrument and bearer instrument is by delivery alone. 
B)  Negotiation of both an order instrument and bearer instrument require endorsement plus delivery. 
C)  Negotiation of an order instrument is by endorsement plus delivery, while negotiation of a bearer instrument is by delivery alone. 
D)  Negotiation of a bearer instrument is by endorsement plus delivery, while negotiation of an order instrument is by delivery alone. 
E)  Negotiation of both an order instrument and a bearer instrument requires both delivery and an additional three days to allow for bank clearance.

Question 9

Article 3 of the UCC recognizes three types of negotiable instruments: notes, drafts, and checks.

Accepted Answer

A) True 
 B)False

Question 10

Nelda writes a check to Jorge. When is this check actually payable?

Accepted Answer

A)  Within twenty-four hours after it is issued. 
B)  As soon as a bank clears it but no longer than 3 business days. 
C)  Two days after it is issued. 
D)  As soon as it is issued. 
E)  No later than 48 hours after it is issued. 
A)  Within twenty-four hours after it is issued. 
B)  As soon as a bank clears it but no longer than 3 business days. 
C)  Two days after it is issued. 
D)  As soon as it is issued. 
E)  No later than 48 hours after it is issued.

Question 11

Which of the following is not a bearer instrument?

Accepted Answer

A)  An instrument payable to no one. 
B)  An instrument payable to "X." 
C)  An instrument payable to "cash." 
D)  An instrument payable to "bearer." 
E)  An instrument payable to "the order of John Doe." 
A)  An instrument payable to no one. 
B)  An instrument payable to "X." 
C)  An instrument payable to "cash." 
D)  An instrument payable to "bearer." 
E)  An instrument payable to "the order of John Doe."

Question 12

[Yard Mowing] Sophie agreed to mow Reza's yard once a week for $50 per week throughout the summer. Sophie, however, was having trouble getting her money from Reza. On one occasion, he in handwriting gave her an IOU saying "I, Reza Salehi, owe Sophie Smith $50." A couple of weeks later, Reza did not have the money to pay Sophie what he owed her, and he handwrote the following on a piece of paper and gave it to her: "I, Reza Salehi, promise to pay Sophie Smith or to bearer, the sum of $100 on Monday, July 22, 2016." Sophie quit mowing Reza's yard; and, disgusted with Reza, Sophie assigned both documents to Vince. When Vince presented the documents to Reza, Reza refused to pay on the basis that after inspecting the yard, he decided that Sophie was doing a poor job. Vince told him the documents constituted negotiable instruments, but Reza pointed out that he had not signed the documents with his signature at the end.
-Which of the following is true regarding the effect on negotiability of Reza's determination that Sophie did a poor job mowing the yard?

Accepted Answer

A)  Sophie's performance prevents the instruments from being negotiable only if Reza meets the burden of proof of establishing to the judge by a preponderance of the evidence that Sophie did a poor job mowing the yard. 
B)  Sophie's performance prevents the instruments from being negotiable only if Sophie meets the burden of proof of establishing to the judge by a preponderance of the evidence that she did an acceptable job mowing the yard. 
C)  Sophie's performance prevents the instruments from being negotiable only if Reza meets the burden of proof of establishing to the judge by a preponderance of the evidence that Sophie did a poor job mowing the yard, and if Sophie signed and provided to Reza a document agreeing that the instrument would lack negotiability unless she properly performed. 
D)  Sophie's performance prevents the instruments from being negotiable only if Sophie meets the burden of proof of establishing to the judge by a preponderance of the evidence that she did an acceptable job mowing the yard and that she did not sign any document agreeing that the instrument would lack negotiability upon Reza's objection. 
E)  Manner of performance is not one of the listed elements for a finding of negotiability. 
A)  Sophie's performance prevents the instruments from being negotiable only if Reza meets the burden of proof of establishing to the judge by a preponderance of the evidence that Sophie did a poor job mowing the yard. 
B)  Sophie's performance prevents the instruments from being negotiable only if Sophie meets the burden of proof of establishing to the judge by a preponderance of the evidence that she did an acceptable job mowing the yard. 
C)  Sophie's performance prevents the instruments from being negotiable only if Reza meets the burden of proof of establishing to the judge by a preponderance of the evidence that Sophie did a poor job mowing the yard, and if Sophie signed and provided to Reza a document agreeing that the instrument would lack negotiability unless she properly performed. 
D)  Sophie's performance prevents the instruments from being negotiable only if Sophie meets the burden of proof of establishing to the judge by a preponderance of the evidence that she did an acceptable job mowing the yard and that she did not sign any document agreeing that the instrument would lack negotiability upon Reza's objection. 
E)  Manner of performance is not one of the listed elements for a finding of negotiability.

Question 13

Carl and Anabelle are arguing about negotiable instruments under the UCC and which article governs them. Which Article of the UCC governs negotiable instruments?

Accepted Answer

A)  Article 1 
B)  Article 2 
C)  Article 3 
D)  Article 7 
E)  Article 9 
A)  Article 1 
B)  Article 2 
C)  Article 3 
D)  Article 7 
E)  Article 9

Question 14

Which of the following refers to the quality of a negotiable instrument that ensures its longevity?

Accepted Answer

A)  Durability 
B)  Sustainability 
C)  Relative permanence 
D)  Movability 
E)  Viability 
A)  Durability 
B)  Sustainability 
C)  Relative permanence 
D)  Movability 
E)  Viability

Question 15

What is the difference between a demand instrument and a time instrument?

Accepted Answer

With a demand instrument, the

Question 16

Anne orally promises Julia that in return for Julia washing Anne's dog, Anne unconditionally promises to pay Julia $50 the next Wednesday. Is a contract formed, is it negotiable, and why or why not?

Accepted Answer

It appears that a contract is formed bec

Question 17

A check is always a[n] ________ instrument and can never be a[n] ________ instrument.

Accepted Answer

A)  Time; demand 
B)  Demand; order 
C)  Time; order 
D)  Order; bearer 
E)  Demand; time 
A)  Time; demand 
B)  Demand; order 
C)  Time; order 
D)  Order; bearer 
E)  Demand; time

Question 18

A note is a promise, by the maker of the note, to pay a payee.

Accepted Answer

A) True 
 B)False

Question 19

A ________ is a two-party instrument and a ________ is a three-party instrument.

Accepted Answer

A)  Note; check 
B)  Note; draft 
C)  Check; note 
D)  Draft; note 
E)  Check; draft 
A)  Note; check 
B)  Note; draft 
C)  Check; note 
D)  Draft; note 
E)  Check; draft

Question 20

Which of the following is true regarding the status of negotiable instruments in regard to international transactions?

Accepted Answer

A)  The World Trade Organization defines and enforces concepts of negotiability for all member nations. 
B)  The United Nations Committee on Contracts defines and enforces concepts of negotiability for all member nations. 
C)  The Uniform Commercial Code is accepted as the defining word on negotiability in North America and Europe. 
D)  The Uniform Negotiation Act, agreed upon by a majority of countries, addresses definitions in regard to negotiability. 
E)  The definitions in regard to negotiable contracts vary from country to country. 
A)  The World Trade Organization defines and enforces concepts of negotiability for all member nations. 
B)  The United Nations Committee on Contracts defines and enforces concepts of negotiability for all member nations. 
C)  The Uniform Commercial Code is accepted as the defining word on negotiability in North America and Europe. 
D)  The Uniform Negotiation Act, agreed upon by a majority of countries, addresses definitions in regard to negotiability. 
E)  The definitions in regard to negotiable contracts vary from country to country.

Exam 26: Negotiable Instruments: Negotiability and Transferability

Which of the following is false regarding the UCC's signature requirement for a negotiable instrument?

A negotiable instrument is a written document containing the signature of the creator that makes an unconditional promise or order to pay a sum certain of money ________.

What is the effect of Hye agreeing to give Sam a DVD in return for the book?

________ is the original generic term for the documents used as payments to facilitate commercial transactions.

When a specific payee is named, the document is a(n) ________ instrument.

[Auto Repair] Sam writes a check from his checking account with Banking International to pay Auto Repair for service work it performed on his vehicle. -Under the UCC, what role does Banking International hold?

List the seven requirements for an instrument to be negotiable.

Which statement is true regarding negotiation of an instrument?

Article 3 of the UCC recognizes three types of negotiable instruments: notes, drafts, and checks.

Nelda writes a check to Jorge. When is this check actually payable?

Which of the following is not a bearer instrument?

Carl and Anabelle are arguing about negotiable instruments under the UCC and which article governs them. Which Article of the UCC governs negotiable instruments?

Which of the following refers to the quality of a negotiable instrument that ensures its longevity?

What is the difference between a demand instrument and a time instrument?

Anne orally promises Julia that in return for Julia washing Anne's dog, Anne unconditionally promises to pay Julia $50 the next Wednesday. Is a contract formed, is it negotiable, and why or why not?

A check is always a[n] ________ instrument and can never be a[n] ________ instrument.

A note is a promise, by the maker of the note, to pay a payee.

A ________ is a two-party instrument and a ________ is a three-party instrument.

Which of the following is true regarding the status of negotiable instruments in regard to international transactions?

An Introduction to Dynamic Business Law

Business Ethics

The Us Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title, Risk of Loss, and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, Personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

Filters

A check is always a[n] instrument and can never be a[n] instrument.

A is a two-party instrument and a is a three-party instrument.