Question 1

A check that is postdated ceases to be order paper.

Accepted Answer

A) True 
 B)False

Question 2

An authorized agent signing an instrument will not be liable on the instrument if the agent discloses on the paper either the identity of the principal or the fact that the agent has signed in a representative capacity.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following terms would make an instrument nonnegotiable?

Accepted Answer

A) ​It is dependent upon an event. 
B) It is undated.​ 
C) It is payable in foreign money.​ 
D) It gives the holder the right to receive interest.​ 
A) ​It is dependent upon an event. 
B) It is undated.​ 
C) It is payable in foreign money.​ 
D) It gives the holder the right to receive interest.​

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

If an order or promise is not for money, the instrument is not negotiable.

Accepted Answer

A) True 
 B)False

Question 6

The person to whom the order in a draft is addressed is known as the:​

Accepted Answer

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

Question 7

The party who writes or creates a promissory note is called the:

Accepted Answer

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

Question 8

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):

Accepted Answer

A) ​acceptor. 
B) accommodation party.​ 
C) payee.​ 
D) secondary obligator.​ 
A) ​acceptor. 
B) accommodation party.​ 
C) payee.​ 
D) secondary obligator.​

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) ​one 
B) two 
C) three​ 
D) four​ 
A) ​one 
B) two 
C) three​ 
D) four​

Question 11

If  instrument is negotiable, it can be:​

Accepted Answer

A) ​paid on demand. 
B) cancelled by the maker.​ 
C) assigned by contract.​ 
D) transferred by negotiation.​ 
A) ​paid on demand. 
B) cancelled by the maker.​ 
C) assigned by contract.​ 
D) transferred by negotiation.​

Question 12

To be negotiable, an instrument must include all of the following, except:​

Accepted Answer

A) ​a writing. 
B) signature of the maker or drawer.​ 
C) unconditional promise or order to pay.​ 
D) ​holder in due course. 
A) ​a writing. 
B) signature of the maker or drawer.​ 
C) unconditional promise or order to pay.​ 
D) ​holder in due course.

Exam 27: Kinds of Negotiable Instruments and Negotiability

A check that is postdated ceases to be order paper.

An authorized agent signing an instrument will not be liable on the instrument if the agent discloses on the paper either the identity of the principal or the fact that the agent has signed in a representative capacity.

Which of the following terms would make an instrument nonnegotiable?

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

If an order or promise is not for money, the instrument is not negotiable.

The person to whom the order in a draft is addressed is known as the:​

The party who writes or creates a promissory note is called the:

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):

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

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

If instrument is negotiable, it can be:​

To be negotiable, an instrument must include all of the following, except:​

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor-Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Filters

The person to whom the order in a draft is addressed is known as the:

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

If instrument is negotiable, it can be:

To be negotiable, an instrument must include all of the following, except: