Question 1

Notes and certificates of deposit are orders to pay money.

Accepted Answer

A) True 
 B)False

Question 2

Explain the effect that a reference to other agreements has on negotiable instruments and the difference between a mere reference and a negotiable instrument's being subject to the terms of another agreement.

Accepted Answer

A reference to the mere existence of ano

Question 3

Which of the following will destroy negotiability?

Accepted Answer

A)  Making the instrument subject to the terms of another agreement. 
B)  Signing a check with an "X." 
C)  Making the instrument payable in Japanese yen. 
D)  Signing a check in pencil. 
A)  Making the instrument subject to the terms of another agreement. 
B)  Signing a check with an "X." 
C)  Making the instrument payable in Japanese yen. 
D)  Signing a check in pencil.

Question 4

Negotiable instruments:

Accepted Answer

A)  have increased in usage to the point where they are now approximately equal to usage of cash for payments. 
B)  are used primarily for smaller transactions. 
C)  include drafts, promissory notes, assignments, and certificates of deposit. 
D)  in the form of checks have decreased in use since 2000. 
A)  have increased in usage to the point where they are now approximately equal to usage of cash for payments. 
B)  are used primarily for smaller transactions. 
C)  include drafts, promissory notes, assignments, and certificates of deposit. 
D)  in the form of checks have decreased in use since 2000.

Question 5

Postdating an instrument will destroy its negotiability.

Accepted Answer

A) True 
 B)False

Question 6

An "I.O.U." is a negotiable instrument.

Accepted Answer

A) True 
 B)False

Question 7

Revised Article 1 of the UCC states that the "money" requirement for a negotiable instrument means the current official currency of the government, not just a medium of exchange authorized or adopted by a sovereign government as part of its currency.

Accepted Answer

A) True 
 B)False

Question 8

A maker must sign in the lower right-hand corner of the instrument.

Accepted Answer

A) True 
 B)False

Question 9

An incomplete instrument is not negotiable.However, when it is completed, it may become negotiable.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following has been held to destroy the negotiability of an instrument and to render its transfer a contractual assignment?

Accepted Answer

A)  "Pay to the order of John Jones." 
B)  "I wish you would pay." 
C)  "Pay bearer." 
D)  None of these. 
A)  "Pay to the order of John Jones." 
B)  "I wish you would pay." 
C)  "Pay bearer." 
D)  None of these.

Question 11

Distinguish between a note and a certificate of deposit.How are they alike? How are they different? Explain your answer.

Accepted Answer

Notes and CD's are two-party instruments

Question 12

An authorization to confess judgment on the instrument destroys its negotiability.

Accepted Answer

A) True 
 B)False

Question 13

The person who signs a note and promises to pay it is the maker.

Accepted Answer

A) True 
 B)False

Question 14

A check is a draft payable on demand.

Accepted Answer

A) True 
 B)False

Question 15

Identify which of the following meet the Article 3 negotiability requirement of being payable at a definite time: (a) A note payable "on or before June 14, 2014." (b) A dated instrument payable "30 days after date." (c) An undated instrument payable "30 days after date." (d) An instrument payable "when Baxter is promoted to plant manager." (e) A note payable on December 31, subject to acceleration by the holder." (f) A note granting the holder the option to extend maturity of the instrument for an indefinite period.

Accepted Answer

Illustrations (a), (b), (e), and (f) are

Question 16

The Revised Article 3 of the UCC provides that a check which meets all requirements of being a negotiable instrument, except that it is not payable to bearer or order, is nevertheless a negotiable instrument.

Accepted Answer

A) True 
 B)False

Question 17

An instrument is payable to order if it is payable:

Accepted Answer

A)  to the order of an identified person. 
B)  to an identified person or order. 
C)  Both of these. 
D)  Neither of these. 
A)  to the order of an identified person. 
B)  to an identified person or order. 
C)  Both of these. 
D)  Neither of these.

Question 18

A definite time required for negotiability would NOT be satisfied in which instance?

Accepted Answer

A)  Payable on or before January 2, 2019. 
B)  Payable one year from the completion of the building 
C)  Payable one week after demand is made. 
D)  Payable on June 15, 2019 or, if the building is not complete on that date, one year from that date. 
A)  Payable on or before January 2, 2019. 
B)  Payable one year from the completion of the building 
C)  Payable one week after demand is made. 
D)  Payable on June 15, 2019 or, if the building is not complete on that date, one year from that date.

Question 19

In the development of the law of negotiable instruments, which of the following was not a step?

Accepted Answer

A)  Centuries ago, contract rights to the payment of money were not assignable because the contractual promise ran to the promisee. 
B)  Contractual rights became assignable to third parties. 
C)  The law of assignments changed to permit assignees to obtain greater rights than their assignors. 
D)  The concept of a holder in due course developed, which allowed certain good faith transferees who gave value to acquire the right to be paid, free of most of the defenses to which an assignee would be subject. 
A)  Centuries ago, contract rights to the payment of money were not assignable because the contractual promise ran to the promisee. 
B)  Contractual rights became assignable to third parties. 
C)  The law of assignments changed to permit assignees to obtain greater rights than their assignors. 
D)  The concept of a holder in due course developed, which allowed certain good faith transferees who gave value to acquire the right to be paid, free of most of the defenses to which an assignee would be subject.

Question 20

A draft involves three parties: a drawer, a drawee, and a payee.

Accepted Answer

A) True 
 B)False

Exam 24: Form and Content

Notes and certificates of deposit are orders to pay money.

Explain the effect that a reference to other agreements has on negotiable instruments and the difference between a mere reference and a negotiable instrument's being subject to the terms of another agreement.

Which of the following will destroy negotiability?

Negotiable instruments:

Postdating an instrument will destroy its negotiability.

An "I.O.U." is a negotiable instrument.

Revised Article 1 of the UCC states that the "money" requirement for a negotiable instrument means the current official currency of the government, not just a medium of exchange authorized or adopted by a sovereign government as part of its currency.

A maker must sign in the lower right-hand corner of the instrument.

An incomplete instrument is not negotiable.However, when it is completed, it may become negotiable.

Which of the following has been held to destroy the negotiability of an instrument and to render its transfer a contractual assignment?

Distinguish between a note and a certificate of deposit.How are they alike? How are they different? Explain your answer.

An authorization to confess judgment on the instrument destroys its negotiability.

The person who signs a note and promises to pay it is the maker.

A check is a draft payable on demand.

The Revised Article 3 of the UCC provides that a check which meets all requirements of being a negotiable instrument, except that it is not payable to bearer or order, is nevertheless a negotiable instrument.

An instrument is payable to order if it is payable:

A definite time required for negotiability would NOT be satisfied in which instance?

In the development of the law of negotiable instruments, which of the following was not a step?

A draft involves three parties: a drawer, a drawee, and a payee.

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remediespart Iv: Sales

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remediespart V: Negotiable Instruments

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

Relationship With Third Partiespart Vii: Business Associations

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Bankruptcypart Ix: Regulation of Business

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

International Business Lawpart X: Property

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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