Exam 27: Kinds of Negotiable Instruments and Negotiability

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

A promissory note that is payable "on the date of my marriage" is nonnegotiable even if the maker of the note marries.

Negotiability is the characteristic that distinguishes commercial paper and instruments from ordinary contracts.

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

The bank is the drawee on a check and has no liability until it has accepted the instrument.

A(n) __________ instrument's terms are enforceable, but the instrument is treated simply as a contract governed by contract law.

Revised UCC Article 3 refers to all of the following as secondary obligors, except:​

An action taken by a person on behalf of another is called:​

Commercial paper are transferable, written, signed promises to pay a specified sum of money.

George was the maker of a written promissory note that stated that $500 would be paid on the sale of George's automobile.George initialed the note instead of writing his full name.The promissory note stated that it would be payable six months from the date.The promissory note was not dated.You now have come into possession of this note.Is this note negotiable? Discuss the elements of negotiability and whether each one has been met.​

JeanClaude creates and signs a promissory note.He promises to pay Suzy $1,000 worth of French francs plus $500 worth of custom-made shirts on October 15, in exchange for Suzy's help in renovating his kitchen.The note is :

The drawee on a check can be a bank.

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

When ambiguous language in an instrument exists:

The drawer is the person on whom the order to pay a draft is made.

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

If a check is made payable to Paolo, and Paolo signs on the back of the check, Paolo is:​

Order instruments are negotiated by:

An instrument is order paper when by its terms it is payable to the order of any person described in it, or to a person or order.

In a negotiable instrument, the promise or order to pay must be unconditional.