Question 1

An instrument executed with a lead pencil does not meet the legal requirements of negotiability.

Accepted Answer

A) True 
 B)False  False

Question 2

The sum payable in a negotiable instrument cannot be dependent on future profits.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following is a requirement of negotiability?

Accepted Answer

A)  The payee and the drawee need not be designated. 
B)  The instrument must be in writing and signed by the party executing it. 
C)  The instrument must provide for the payment of a flexible amount of money. 
D)  The order or the promise in the instrument must be conditional. 
A)  The payee and the drawee need not be designated. 
B)  The instrument must be in writing and signed by the party executing it. 
C)  The instrument must provide for the payment of a flexible amount of money. 
D)  The order or the promise in the instrument must be conditional. B

Question 4

Which of the following is true of a check made out to the order of a person?

Accepted Answer

A)  The drawee can deposit the check after its validity expires. 
B)  The drawee can only deposit the check into his own account. 
C)  The drawee cannot indorse the check to anyone else. 
D)  The drawee can encash the check at the appropriate bank. 
A)  The drawee can deposit the check after its validity expires. 
B)  The drawee can only deposit the check into his own account. 
C)  The drawee cannot indorse the check to anyone else. 
D)  The drawee can encash the check at the appropriate bank.

Question 5

A negotiable instrument must be in writing and signed by the party executing it.

Accepted Answer

A) True 
 B)False

Question 6

Jim agreed to pay Jose $1,000 by check, provided he is able to sell his farm. However, he did not mention the number of days it would take for him to sell the farm nor did he provide a contingency date. Which of the following is legally permissible in this scenario?

Accepted Answer

A)  Jose can take possession of Jim's farm as repayment. 
B)  Jim's promise to pay is valid as he has offered Jose the money. 
C)  Jim can wait till he sells the farm and then pay the money. 
D)  Jim's promise to pay is conditional and he must remake the promise. 
A)  Jose can take possession of Jim's farm as repayment. 
B)  Jim's promise to pay is valid as he has offered Jose the money. 
C)  Jim can wait till he sells the farm and then pay the money. 
D)  Jim's promise to pay is conditional and he must remake the promise.

Question 7

The name of the place where an instrument was drawn need not be specified.

Accepted Answer

A) True 
 B)False

Question 8

An instrument is payable to order when the drawer wishes to indicate that the instrument will be paid, to anyone the payee may transfer the instrument by indorsement.

Accepted Answer

A) True 
 B)False

Question 9

In case a negotiable instrument is only partially filled in and signed before delivery:

Accepted Answer

A)  the maker or drawer is liable if the blanks are filled in contrary to instructions. 
B)  the original payee can claim the unauthorized amount from the maker. 
C)  the maker is liable to a holder for any amount filled in the blanks. 
D)  the maker is liable to a holder in due course for any amount without authorization. 
A)  the maker or drawer is liable if the blanks are filled in contrary to instructions. 
B)  the original payee can claim the unauthorized amount from the maker. 
C)  the maker is liable to a holder for any amount filled in the blanks. 
D)  the maker is liable to a holder in due course for any amount without authorization.

Question 10

The language used in a promissory note need not show that a promise is intended.

Accepted Answer

A) True 
 B)False

Question 11

A negotiable instrument could be payable in gold bullion.

Accepted Answer

A) True 
 B)False

Question 12

Explain the requirements of negotiability.

Accepted Answer

An instrument must comply with seven req

Question 13

The law requires that a negotiable instrument must be written in a  particular form.

Accepted Answer

A) True 
 B)False

Question 14

When a negotiable instrument is payable to order, the payee need not be named.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following best describes delivery?

Accepted Answer

A)  It is the unintentional transfer of possession or theft of something. 
B)  It is the intentional transfer of something illegal for safekeeping. 
C)  It is the conditional transfer of possession and control of something. 
D)  It is the intentional transfer of possession and control of something. 
A)  It is the unintentional transfer of possession or theft of something. 
B)  It is the intentional transfer of something illegal for safekeeping. 
C)  It is the conditional transfer of possession and control of something. 
D)  It is the intentional transfer of possession and control of something.

Question 16

The UCC defines _____ as "the first delivery of an instrument by the maker or drawer for the purpose of giving rights on the instrument to any person."

Accepted Answer

A)  possession 
B)  negotiation 
C)  issue 
D)  transfer 
A)  possession 
B)  negotiation 
C)  issue 
D)  transfer

Question 17

The negotiability of an instrument is affected if it is undated.

Accepted Answer

A) True 
 B)False

Question 18

Whenever delivery is made in connection with the original issue, it must be conditional.

Accepted Answer

A) True 
 B)False

Question 19

An order or promise in an negotiable instrument must be conditional.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true of a negotiable instrument?

Accepted Answer

A)  An instrument must be completely typed. 
B)  An instrument must be written with pen and ink. 
C)  An instrument can be partly written and partly typed. 
D)  A negotiable instrument cannot be written with a pencil. 
A)  An instrument must be completely typed. 
B)  An instrument must be written with pen and ink. 
C)  An instrument can be partly written and partly typed. 
D)  A negotiable instrument cannot be written with a pencil.

Exam 21: Essentials of Negotiability

An instrument executed with a lead pencil does not meet the legal requirements of negotiability.

The sum payable in a negotiable instrument cannot be dependent on future profits.

Which of the following is a requirement of negotiability?

Which of the following is true of a check made out to the order of a person?

A negotiable instrument must be in writing and signed by the party executing it.

Jim agreed to pay Jose $1,000 by check, provided he is able to sell his farm. However, he did not mention the number of days it would take for him to sell the farm nor did he provide a contingency date. Which of the following is legally permissible in this scenario?

The name of the place where an instrument was drawn need not be specified.

An instrument is payable to order when the drawer wishes to indicate that the instrument will be paid, to anyone the payee may transfer the instrument by indorsement.

In case a negotiable instrument is only partially filled in and signed before delivery:

The language used in a promissory note need not show that a promise is intended.

A negotiable instrument could be payable in gold bullion.

Explain the requirements of negotiability.

The law requires that a negotiable instrument must be written in a particular form.

When a negotiable instrument is payable to order, the payee need not be named.

Which of the following best describes delivery?

The UCC defines _____ as "the first delivery of an instrument by the maker or drawer for the purpose of giving rights on the instrument to any person."

The negotiability of an instrument is affected if it is undated.

Whenever delivery is made in connection with the original issue, it must be conditional.

An order or promise in an negotiable instrument must be conditional.

Which of the following is true of a negotiable instrument?

Introduction to Law

Courts and Court Procedure

Business Torts and Crimes

Government Regulation of Business

Nature and Classes of Contracts

Offer and Acceptance

Capacity to Contract

Consideration

Defective Agreements

Illegal Agreements

Written Contracts

Third Parties and Contracts

Termination of Contracts

Nature of Personal Property

Special Bailments

Sales of Personal Property

Formalities of a Sale

Transfer of Title and Risk in Sales Con

Warranties, Product Liability, and Cons

Nature of Negotiable Instruments

Promissory Notes and Drafts

Negotiation and Discharge

Liabilities of Parties and Holders in Due Course

Defenses

Nature and Creation of an Agency

Operation and Termination of an Agency

Employer and Employee Relations

Employees Rights

Labor Legislation

Introduction to Business Organization

Creation and Operation of a Partnership

Dissolution of a Partnership

Nature of a Corporation

Ownership of a Corporation

Management and Dissolution of a Corpora

Principles of Insurance

Types of Insurance

Security Devices

Bankruptcy

Nature of Real Property

Transfer of Real Property

Real Estate Mortgages

Landlord and Tenant

Wills, Inheritances, and Trusts

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