Exam 27: Kinds of Negotiable Instruments and Negotiability

When the drawee of a draft has indicated by writing or record a willingness to pay the amount specified in the draft the drawee is called a(n):

A check is an order by a bank itself to pay a sum of money to the order of another party.

The maker is the person who writes out and creates a promissory note.

The signature on an instrument must appear at the lower right-hand corner of the face of the instrument.

Which of the following terms would make an instrument nonnegotiable?

The requirement of a sum certain in money is fulfilled even though the interest rate changes at maturity.

A person who becomes a party to an instrument to add strength to the instrument for the benefit of another party to the instrument is called a:

Article 3 of the UCC establishes a __________-year statute of limitations for most actions involving negotiable instruments.

The drawee on a check can be a bank.

If an instrument states no time for payment, the note is payable on demand.

Any of the following constitutes a signature as an element of negotiability, except:

Negotiation of commercial paper results in lesser rights to transferees than those rights afforded assignees of contracts under contract law.

Order instruments are negotiated by:

Conville signed a note as an officer of the Hughesville Manufacturing Corporation, but she did not name the corporation in the note or indicate that she was acting as an officer for it. Later, she was sued by the Grange National Bank, the holder of the note. She raised the defense that the corporation was liable on the note. Who was liable?

The payee has no rights in an instrument until the drawer or the maker has delivered it to the payee.

Revised UCC Article 3 refers to drawers, indorsers, and accommodation parties as "secondary obligors."

A check that is made out to "Cash" and signed by the writer is

Article 2 of the Uniform Commercial Code governs negotiable instruments.

Bruce agrees to buy Joe's ranch. They draw up a note, under which Bruce is to pay Joe in three installments, each payable on a specified date. Joe has concerns about Bruce's ability to pay on time, so he insists that the note include an acceleration clause. Such a clause would allow Joe to:

Commercial paper facilitates the transfer of funds and payment.