Question 1

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

Question 2

Which of the following notes would not be negotiable? A written, signed promise to pay:

Accepted Answer

A)  $50,000 to the order of Crouch, and the maker of the note orally stated to Crouch that the money would only be paid if all contractual specifications were met. 
B)  $500 and a rick of firewood on or before September 10. 
C)  which includes a statement that, "This note is given in partial payment for a piano to be delivered in one week from date in accordance with a contract of this date between the maker and the payee." 
D)  All of these. 
A)  $50,000 to the order of Crouch, and the maker of the note orally stated to Crouch that the money would only be paid if all contractual specifications were met. 
B)  $500 and a rick of firewood on or before September 10. 
C)  which includes a statement that, "This note is given in partial payment for a piano to be delivered in one week from date in accordance with a contract of this date between the maker and the payee." 
D)  All of these.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

A promise or order is payable at a definite time if it is payable:

Accepted Answer

A)  at a time readily ascertainable at the time the promise or order is issued. 
B)  at a fixed date or dates. 
C)  at a definite period of time after sight or acceptance. 
D)  All of these. 
A)  at a time readily ascertainable at the time the promise or order is issued. 
B)  at a fixed date or dates. 
C)  at a definite period of time after sight or acceptance. 
D)  All of these.

Question 5

X signs a negotiable instrument ordering Y to pay Z the sum of $500. Y is the:

Accepted Answer

A)  maker. 
B)  drawee. 
C)  payee. 
D)  drawer. 
A)  maker. 
B)  drawee. 
C)  payee. 
D)  drawer.

Question 6

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 7

A signed promissory note stating "I promise to pay to Bonnie Ramcell $600 on December 15, 2014" is not covered by Article 3 of the UCC.

Accepted Answer

A) True 
 B)False

Question 8

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 9

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 10

Which of the following would be an unconditional promise or order to pay?

Accepted Answer

A)  "I hereby acknowledge my debt to John Jones." 
B)  "I hereby promise to pay $2,000 to John Jones provided the lawn tractor sold meets the contractual specifications." 
C)  "Pay to the order of bearer ten dollars." 
D)  "IOU fifty dollars." 
A)  "I hereby acknowledge my debt to John Jones." 
B)  "I hereby promise to pay $2,000 to John Jones provided the lawn tractor sold meets the contractual specifications." 
C)  "Pay to the order of bearer ten dollars." 
D)  "IOU fifty dollars."

Question 11

Which article of the UCC governs "negotiable instruments"?

Accepted Answer

A)  Article 6. 
B)  Article 2. 
C)  Article 3. 
D)  Article 9. 
A)  Article 6. 
B)  Article 2. 
C)  Article 3. 
D)  Article 9.

Question 12

If Sam writes a check drawn on his account at First Bank to State University to pay his tuition:

Accepted Answer

A)  Sam is the drawer. 
B)  the university is the drawee. 
C)  the bank is the payee. 
D)  Sam is the maker. 
A)  Sam is the drawer. 
B)  the university is the drawee. 
C)  the bank is the payee. 
D)  Sam is the maker.

Question 13

Notes and certificates of deposit are orders to pay money.

Accepted Answer

A) True 
 B)False

Question 14

Bill's car broke down on a dark, rainy night. Along came Andy in his service station's four-wheel drive truck with tools and supplies in the back. Bill didn't have any credit cards and only $3.25 cash, so Andy told him to write a check or an IOU. Neither Andy nor Bill had any paper, so Bill wrote on the cover of Andy's lunchbox: "If my car is fixed right by Andy Walcott, I will pay him $150. (Signed) Bill Boyd." Andy indorses the note and takes it to a commercial factor for negotiation. The factor refuses, saying it is non-negotiable because it:

Accepted Answer

A)  is written on a lunchbox. 
B)  is conditional on satisfactory repair of the car. 
C)  mentions the existence of a contract to repair the car. 
D)  All of these. 
E)  None of these. 
A)  is written on a lunchbox. 
B)  is conditional on satisfactory repair of the car. 
C)  mentions the existence of a contract to repair the car. 
D)  All of these. 
E)  None of these.

Question 15

A __________ is a specialized form of promise to pay money given by a maker in which the bank is the maker.

Accepted Answer

A)  note 
B)  certificate of deposit 
C)  trade acceptance 
D)  cashier's check 
A)  note 
B)  certificate of deposit 
C)  trade acceptance 
D)  cashier's check

Question 16

Postdating an instrument will destroy its negotiability.

Accepted Answer

A) True 
 B)False

Question 17

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 18

The drawee is the individual who signs a check and promises to pay.

Accepted Answer

A) True 
 B)False

Question 19

The court in Cooperative Centrale Raiffeisen-Boerenleenbank B.A. v. Bailey found:

Accepted Answer

A)  whether an instrument is negotiable is a question of fact. 
B)  whether an instrument is negotiable is to be determined without reference to the intent of the parties. 
C)  the wording of the note was unclear and therefore it did not fall within the UCC Article 3 requirements of negotiability. 
D)  the question of whether the promissory note was negotiable had to be determined by questioning the parties to the transaction as to their intent. 
A)  whether an instrument is negotiable is a question of fact. 
B)  whether an instrument is negotiable is to be determined without reference to the intent of the parties. 
C)  the wording of the note was unclear and therefore it did not fall within the UCC Article 3 requirements of negotiability. 
D)  the question of whether the promissory note was negotiable had to be determined by questioning the parties to the transaction as to their intent.

Question 20

What are the requirements of negotiability under the Code? List and briefly summarize them.

Accepted Answer

(1) Be in writing. The instrument must b

Exam 24: Form and Content

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

Which of the following notes would not be negotiable? A written, signed promise to pay:

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

A promise or order is payable at a definite time if it is payable:

X signs a negotiable instrument ordering Y to pay Z the sum of $500. Y is the:

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?

A signed promissory note stating "I promise to pay to Bonnie Ramcell $600 on December 15, 2014" is not covered by Article 3 of the UCC.

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.

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.

Which of the following would be an unconditional promise or order to pay?

Which article of the UCC governs "negotiable instruments"?

If Sam writes a check drawn on his account at First Bank to State University to pay his tuition:

Notes and certificates of deposit are orders to pay money.

A __________ is a specialized form of promise to pay money given by a maker in which the bank is the maker.

Postdating an instrument will destroy its negotiability.

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

The drawee is the individual who signs a check and promises to pay.

The court in Cooperative Centrale Raiffeisen-Boerenleenbank B.A. v. Bailey found:

What are the requirements of negotiability under the Code? List and briefly summarize them.

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

Trusts and Wills

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