Exam 29: Transfers of Negotiable Instruments and Warranties of Parties

If an instrument is drawn in favor of an officer of a named corporation,the instrument is payable to the corporation,the officer,or any successor to such officer.

A holder of the paper has immunity from certain defenses that might have been asserted against the transferor.

If a negotiable order instrument is transferred to another party without an indorsement,the instrument has been:

The transferring of an instrument in such a way as to make the transferee the holder of the paper is termed:

The order or bearer character of the paper determines how it may be:

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

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

A person who acquires the instrument on which the last indorsement is blank becomes the holder.

If an instrument is payable to alternative payees or if it has been negotiated to alternative indorsees,it may be indorsed and delivered by either of them.

Sue is an employee at an ABC store.One of Sue's duties is to prepare the bank deposit at the end of the business day.Sue had a very busy day and made a few mistakes.All of the checks,except two,were indorsed with the stamp "ABC,Inc." that ABC had provided.The bank received the deposit and noticed the lack of indorsement on the two checks.In addition,three of the checks that Sue was to include with the deposit were lost in the parking lot after closing.Phil found the checks and deposited them into his personal account.What is the effect of ABC's indorsement on the lost checks and the lack of indorsement on the two deposited checks?

A forged or unauthorized indorsement is by definition:

If a lost negotiable instrument is in bearer form at the time of the loss,the finder is entitled to enforce payment.

The implied warranties of an unqualified indorser do not include a guarantee that:

An indorsement "Pay to Donald Hames,Cathy Dukes" is not a valid indorsement because it does not contain the words "order" or "bearer."

When a negotiable instrument is transferred by negotiation,the transferee is recognized as the holder of the paper.

When the name of the payee is spelled incorrectly,the payee:

A qualified indorsement qualifies the effect of a blank or special indorsement by disclaiming certain liabilities of the indorser to a maker or drawee.

It is worse for the holder to lose order paper than to lose bearer paper.

An instrument may be transferred by negotiation or by assignment.

The warranty liability of a qualified indorser is the same as that of an unqualified indorser.