Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

A reference in a negotiable instrument to the existence of a separate agreement to which it is subject destroys the negotiability of the instrument.

Accepted Answer

A) True 
 B)False

Question 5

Bill goes to First Bank to get a loan. He signs a note and agrees to repay the bank. What is the legal term for Bill's status regarding the note?

Accepted Answer

A)  Payee. 
B)  Maker. 
C)  Payor. 
D)  Drawer. 
A)  Payee. 
B)  Maker. 
C)  Payor. 
D)  Drawer.

Question 6

Who are the parties to checks and notes?

Accepted Answer

A check involves three parties. The draw

Question 7

Postdating an instrument will destroy its negotiability.

Accepted Answer

A) True 
 B)False

Question 8

Handwritten words supersede typewritten words contained in negotiable instruments.

Accepted Answer

A) True 
 B)False

Question 9

Carlos wrote a check with the numbers $4500 and the written amount as forty-five dollars. Explain how the ambiguity will be resolved.

Accepted Answer

The check would be interpreted to be for

Question 10

A promissory note is an instrument that involves three parties in three capacities.

Accepted Answer

A) True 
 B)False

Question 11

Under the Check 21 Act:

Accepted Answer

A)  banks must accept checks in electronic form. 
B)  banks are permitted to truncate original checks and process check information electronically. 
C)  banks must create substitute checks which are the legal equivalent of the original checks. 
D)  All of these. 
A)  banks must accept checks in electronic form. 
B)  banks are permitted to truncate original checks and process check information electronically. 
C)  banks must create substitute checks which are the legal equivalent of the original checks. 
D)  All of these.

Question 12

Jake signed and delivered a negotiable promissory note payable to Nancy. Nancy negotiated the note to Fred. Fred now has the same legal status as an assignee of a contract.

Accepted Answer

A) True 
 B)False

Question 13

The UCC states that an instrument fulfills the requirements of being payable to bearer if it:

Accepted Answer

A)  states it is payable to bearer or the order of bearer. 
B)  does not state a payee. 
C)  states it is payable to "cash" or to the order of "cash." 
D)  All of these. 
A)  states it is payable to bearer or the order of bearer. 
B)  does not state a payee. 
C)  states it is payable to "cash" or to the order of "cash." 
D)  All of these.

Question 14

Notes and certificates of deposit are orders to pay money.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Only a bank may serve as the maker of a certificate of a deposit.

Accepted Answer

A) True 
 B)False

Question 17

Negotiability is wholly a matter of form.

Accepted Answer

A) True 
 B)False

Question 18

Carol buys some items at the drugstore and writes a check to the store on her account at First Bank. Who is the drawee?

Accepted Answer

A)  Carol. 
B)  The drugstore. 
C)  First Bank. 
D)  There is none. 
A)  Carol. 
B)  The drugstore. 
C)  First Bank. 
D)  There is none.

Question 19

A provision in a promissory note payable one year from its date that the maker may extend the maturity date six months impairs the note's negotiability.

Accepted Answer

A) True 
 B)False

Question 20

Negotiability invests negotiable instruments with a high degree of marketability and commercial utility by allowing them to be freely transferable and enforceable by a person with the rights of a holder in due course against a person obligated on the instrument.

Accepted Answer

A) True 
 B)False

Exam 24: Form and Content

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

An instrument is payable to order if it is payable:

A reference in a negotiable instrument to the existence of a separate agreement to which it is subject destroys the negotiability of the instrument.

Bill goes to First Bank to get a loan. He signs a note and agrees to repay the bank. What is the legal term for Bill's status regarding the note?

Who are the parties to checks and notes?

Postdating an instrument will destroy its negotiability.

Handwritten words supersede typewritten words contained in negotiable instruments.

Carlos wrote a check with the numbers $4500 and the written amount as forty-five dollars. Explain how the ambiguity will be resolved.

A promissory note is an instrument that involves three parties in three capacities.

Under the Check 21 Act:

Jake signed and delivered a negotiable promissory note payable to Nancy. Nancy negotiated the note to Fred. Fred now has the same legal status as an assignee of a contract.

The UCC states that an instrument fulfills the requirements of being payable to bearer if it:

Notes and certificates of deposit are orders to pay money.

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

Only a bank may serve as the maker of a certificate of a deposit.

Negotiability is wholly a matter of form.

Carol buys some items at the drugstore and writes a check to the store on her account at First Bank. Who is the drawee?

A provision in a promissory note payable one year from its date that the maker may extend the maturity date six months impairs the note's negotiability.

Negotiability invests negotiable instruments with a high degree of marketability and commercial utility by allowing them to be freely transferable and enforceable by a person with the rights of a holder in due course against a person obligated on the instrument.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

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 Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

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 Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

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

Interests in Real Property

Transfer and Control of Real Property

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