Exam 26: Negotiable Instruments: Negotiability and Transferability

Which of the following is true regarding negotiable instruments as compared to contracts?

A(n) ________ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account?

[Used Car Commission] William promised to sell Caileen's car for her, but he wanted a commission of 10%. Caileen signed an instrument promising to pay William a 10% commission if he sold her car. William assigned the agreement to Mehdi. Caileen's car was sold and the buyer paid Caileen. A dispute ensued between Caileen and William regarding whether William found the buyer or the buyer found Caileen. When Mehdi asked Caileen for payment on the instrument, Caileen refused. William, Caileen, and Mehdi settled their dispute without going to court and Caileen wrote Mehdi a check for $3,000. Mehdi endorsed the check on the back by signing his name planning to take it to the bank the next day. Unfortunately, Mehdi lost the check which was found by Caileen and cashed by the local bank. Caileen then left town. -Before Mehdi endorsed the check it was a[n] ________ instrument; and after he endorsed it, the check was a[n] ________ instrument.

A currency or cash substitute has existed for centuries in Anglo-American law.

Which of the following is a note of the bank where a payee purchases it and collects principle plus a set amount of interest in the future?

All negotiable documents should be in electronic format.

An instrument fails to be negotiable because it states, "payment will be made by $100 and a rare antique vase." Which of the following scenarios would render the instrument negotiable?

Which of the following is not required for an instrument to be considered negotiable?