Question 1

Verne has possession of a draft that has been validly negotiated to him.His payment process necessarily includes:

Accepted Answer

A)  presentment of the draft, dishonor, and notice of dishonor. 
B)  exhibiting the instrument, showing reasonable identification, and surrendering the draft if it is paid in full. 
C)  exhibiting the draft, providing a thumbprint signature, and giving a receipt. 
D)  suspending the underlying debt, applying the shelter rule, and making a demand for payment. 
A)  presentment of the draft, dishonor, and notice of dishonor. 
B)  exhibiting the instrument, showing reasonable identification, and surrendering the draft if it is paid in full. 
C)  exhibiting the draft, providing a thumbprint signature, and giving a receipt. 
D)  suspending the underlying debt, applying the shelter rule, and making a demand for payment.

Question 2

Soiya is a holder in due course of a check.Soiya goes to the drawee bank,Last Chance Bank,to cash the check.What is the liability of Last Chance?

Accepted Answer

A)  Last Chance Bank is primarily liable on the check. 
B)  Last Chance Bank is not primarily liable on the check until it accepts the check. 
C)  Last Chance Bank is secondarily liable on the check. 
D)  Last Chance Bank is not secondarily liable on the check until it accepts the check. 
A)  Last Chance Bank is primarily liable on the check. 
B)  Last Chance Bank is not primarily liable on the check until it accepts the check. 
C)  Last Chance Bank is secondarily liable on the check. 
D)  Last Chance Bank is not secondarily liable on the check until it accepts the check.

Question 3

Maurina is an agent of Southland,and she is authorized to sign checks on Southland's bank account.If Maurina signs a check without indicating that she is simply an agent,Maurina will be personally liable on the check.

Accepted Answer

A) True 
 B)False

Question 4

The UCC requires that anyone wishing to cash a check must provide:

Accepted Answer

A)  a picture I.D. 
B)  a major credit card. 
C)  thumbprint proof of identity. 
D)  reasonable identification. 
A)  a picture I.D. 
B)  a major credit card. 
C)  thumbprint proof of identity. 
D)  reasonable identification.

Question 5

Paula is a sales agent for The Rock Insurance Company.Paula accepts a check from a customer made payable to her in payment for the premium on an insurance policy.Prior to depositing the check in The Rock's bank account,Paula indorses the check as follows: "The Rock Insurance Company,by Paula Beck,agent." Assuming that Paula has authority to indorse company checks,if the check is dishonored,then between Paula,The Rock,and the bank:

Accepted Answer

A)  Paula only will be liable. 
B)  Paula and The Rock will be liable. 
C)  The Rock only will be liable. 
D)  The bank will be stuck with the dishonored check. 
A)  Paula only will be liable. 
B)  Paula and The Rock will be liable. 
C)  The Rock only will be liable. 
D)  The bank will be stuck with the dishonored check.

Exam 26: Liability For Negotiable Instruments

Verne has possession of a draft that has been validly negotiated to him.His payment process necessarily includes:

Soiya is a holder in due course of a check.Soiya goes to the drawee bank,Last Chance Bank,to cash the check.What is the liability of Last Chance?

Maurina is an agent of Southland,and she is authorized to sign checks on Southland's bank account.If Maurina signs a check without indicating that she is simply an agent,Maurina will be personally liable on the check.

The UCC requires that anyone wishing to cash a check must provide:

Introduction To Law

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Intentional Torts And Business Torts

Negligence And Strict Liability

Crime

International Law

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Introduction To Sales

Ownership And Risk

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Creating A Negotiable Instrument

Accountants' Liability

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Starting A Business

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