Question 1

A payee whose name is misspelled may indorse with the wrong name, the correct name, or both.

Accepted Answer

A) True 
 B)False

Question 2

Coppersmith executed and delivered negotiable notes to the payee, Charlene.The payee indorsed the notes to Whitehurst but did not deliver them.Instead, she kept the notes in her possession because she wanted to collect the interest during her life and wanted the indorsee to have the notes on her death.After Charlene's death, her executor, Cartwright, found the notes.Both Cartwright and Whitehurst sought to enforce the notes against Coppersmith.Who was entitled to do so?​

Accepted Answer

Cartwright. As executor of the payee, Ca

Question 3

An instrument can be delivered by constructive delivery, in which the transferee has exclusive access to the instrument.​

Accepted Answer

A) True 
 B)False

Question 4

The transferee has only those rights that were possessed by the transferor of the note when a transfer of an instrument is made by:

Accepted Answer

A) ​an assignment. 
B) a negotiation.​ 
C) a sale.​ 
D) a will.​ 
A) ​an assignment. 
B) a negotiation.​ 
C) a sale.​ 
D) a will.​

Question 5

The order or bearer character of a paper is determined as of the time the negotiation takes place.

Accepted Answer

A) True 
 B)False

Question 6

If a lost instrument is order paper, the finder __________.

Accepted Answer

A) ​becomes the assignee of the instrument. 
B) becomes the owner of the instrument.​ 
C) becomes the holder of the instrument.​ 
D) ​does not become the holder of the instrument. 
A) ​becomes the assignee of the instrument. 
B) becomes the owner of the instrument.​ 
C) becomes the holder of the instrument.​ 
D) ​does not become the holder of the instrument.

Question 7

The situation in which an individual impersonates the holder of a savings account and, by presenting a forged withdrawal slip to the savings bank, receives from the bank a check payable to the bank's customer, is covered by the:

Accepted Answer

A) ​impostor rule. 
B) negotiation rule.​ 
C) assignment rule.​ 
D) bank rule.​ 
A) ​impostor rule. 
B) negotiation rule.​ 
C) assignment rule.​ 
D) bank rule.​

Question 8

If an instrument is drawn in favor of a named officer of a corporation, the instrument is payable only to that officer..

Accepted Answer

A) True 
 B)False

Question 9

Bearer paper may only be negotiated by the actual transfer of possession of the instrument.

Accepted Answer

A) True 
 B)False

Question 10

An indorsement "for deposit only" is:​

Accepted Answer

A) ​restrictive. 
B) qualified.​ 
C) special.​ 
D) blank.​ 
A) ​restrictive. 
B) qualified.​ 
C) special.​ 
D) blank.​

Question 11

When a negotiable instrument is transferred by negotiation, the transferee becomes a holder in due course.

Accepted Answer

A) True 
 B)False

Question 12

The transfer and collection of negotiable instruments between banks requires specific indorsements.​

Accepted Answer

A) True 
 B)False

Question 13

Order paper is converted into bearer paper by the holder's blank indorsement.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true of warranties of indorsers?​

Accepted Answer

A) ​The indorser is not entitled to enforce the instrument. 
B) The indorser warrants that the instrument is subject to a defense of any party that can be asserted against the indorser.​ 
C) ​The indorser warrants that he/she has knowledge of the bankruptcy of the maker, acceptor, or drawer. 
D) ​The indorser warrants that there has been no alteration or other irregularity. 
A) ​The indorser is not entitled to enforce the instrument. 
B) The indorser warrants that the instrument is subject to a defense of any party that can be asserted against the indorser.​ 
C) ​The indorser warrants that he/she has knowledge of the bankruptcy of the maker, acceptor, or drawer. 
D) ​The indorser warrants that there has been no alteration or other irregularity.

Question 15

If an instrument is payable to alternative payees, it may be indorsed and delivered by either of them.

Accepted Answer

A) True 
 B)False

Question 16

When a negotiable instrument is negotiated by delivery without indorsement, the warranty liability of the transferor runs:​

Accepted Answer

A) ​only to the immediate transferee. 
B) not to the immediate transferee, but to all subsequent transferees.​ 
C) to both the immediate transferee and all subsequent transferees.​ 
D) neither to the immediate transferee, nor to any subsequent transferees.​ 
A) ​only to the immediate transferee. 
B) not to the immediate transferee, but to all subsequent transferees.​ 
C) to both the immediate transferee and all subsequent transferees.​ 
D) neither to the immediate transferee, nor to any subsequent transferees.​

Exam 28: Transfers of Negotiable Instruments and Warranties of Parties

A payee whose name is misspelled may indorse with the wrong name, the correct name, or both.

An instrument can be delivered by constructive delivery, in which the transferee has exclusive access to the instrument.​

The transferee has only those rights that were possessed by the transferor of the note when a transfer of an instrument is made by:

The order or bearer character of a paper is determined as of the time the negotiation takes place.

If a lost instrument is order paper, the finder __________.

The situation in which an individual impersonates the holder of a savings account and, by presenting a forged withdrawal slip to the savings bank, receives from the bank a check payable to the bank's customer, is covered by the:

If an instrument is drawn in favor of a named officer of a corporation, the instrument is payable only to that officer..

Bearer paper may only be negotiated by the actual transfer of possession of the instrument.

An indorsement "for deposit only" is:​

When a negotiable instrument is transferred by negotiation, the transferee becomes a holder in due course.

The transfer and collection of negotiable instruments between banks requires specific indorsements.​

Order paper is converted into bearer paper by the holder's blank indorsement.

Which of the following is true of warranties of indorsers?​

If an instrument is payable to alternative payees, it may be indorsed and delivered by either of them.

When a negotiable instrument is negotiated by delivery without indorsement, the warranty liability of the transferor runs:​

The Nature and Sources of Law

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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

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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

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Consideration

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Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

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Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Negotiable Instruments and Negotiability

Liability of the Parties Under Negotiable Instruments

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Nature of the Debtor-Creditor Relationship

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Filters

An instrument can be delivered by constructive delivery, in which the transferee has exclusive access to the instrument.

An indorsement "for deposit only" is:

The transfer and collection of negotiable instruments between banks requires specific indorsements.

Which of the following is true of warranties of indorsers?

When a negotiable instrument is negotiated by delivery without indorsement, the warranty liability of the transferor runs: