Question 1

No person is contractually liable on a negotiable instrument unless she or her authorized agent has signed it and the signature is binding on the represented person.

Accepted Answer

A) True 
 B)False

Question 2

The terms of the contract of the parties to a negotiable instrument are set out in:

Accepted Answer

A)  the text of the instrument. 
B)  Article 3 of the Uniform Commercial Code. 
C)  the cashier's check. 
D)  Article 5 of the Uniform Commercial Code. 
A)  the text of the instrument. 
B)  Article 3 of the Uniform Commercial Code. 
C)  the cashier's check. 
D)  Article 5 of the Uniform Commercial Code.

Question 3

Gabrielle borrows $1,000 from Frank to pay for school and gives Frank a note for that amount.Frank wants Gabrielle's father to sign as an accommodation party.Gabrielle's father signs below Gabrielle's signature on the fall of the note.Which of the following statements is true of this case?

Accepted Answer

A)  Only Gabrielle has primary liability as a maker. 
B)  Only Gabrielle's father has primary liability as an accommodation maker. 
C)  Gabrielle and her father have the same contractual liability. 
D)  Gabrielle has primary liability, and her father has secondary liability. 
A)  Only Gabrielle has primary liability as a maker. 
B)  Only Gabrielle's father has primary liability as an accommodation maker. 
C)  Gabrielle and her father have the same contractual liability. 
D)  Gabrielle has primary liability, and her father has secondary liability.

Question 4

Which of the following statements is true of liability on negotiable instruments?

Accepted Answer

A)  It can arise even when a person has not signed the negotiable instrument. 
B)  It cannot arise when a person has authorized someone else to sign the negotiable instrument. 
C)  It can arise from negligence relating to the issuance. 
D)  It cannot arise from improper payment. 
A)  It can arise even when a person has not signed the negotiable instrument. 
B)  It cannot arise when a person has authorized someone else to sign the negotiable instrument. 
C)  It can arise from negligence relating to the issuance. 
D)  It cannot arise from improper payment.

Question 5

Warranties do not depend on presentment,dishonor,and notice but may be utilized before presentment has been made.

Accepted Answer

A) True 
 B)False

Question 6

Maya stole a check from Orhan payable to the order of Orhan.Maya forged Orhan's signature and presented the check for payment at Winston Bank,which honored the check.If Orhan sues Winston Bank for the amount of the check,under what theory,can Orhan recover the funds from the bank?

Accepted Answer

A)  Conversion 
B)  Fraud 
C)  Unfair and deceptive practices 
D)  Fictitious payee rule 
A)  Conversion 
B)  Fraud 
C)  Unfair and deceptive practices 
D)  Fictitious payee rule

Question 7

When an incomplete instrument is completed after it has left the drawer's hands,a holder in due course can:

Accepted Answer

A)  enforce it as completed. 
B)  enforce only the intent of the drawer. 
C)  lose all rights to the instrument. 
D)  not enforce it as completed. 
A)  enforce it as completed. 
B)  enforce only the intent of the drawer. 
C)  lose all rights to the instrument. 
D)  not enforce it as completed.

Question 8

Conversion of an instrument:

Accepted Answer

A)  is an authorized assumption and exercise of ownership over it. 
B)  may occur if a person pays an instrument on a forged indorsement. 
C)  differs from conversion of personal property with respect to the applicable laws. 
D)  occurs if it does not lack indorsement necessary for negotiation. 
A)  is an authorized assumption and exercise of ownership over it. 
B)  may occur if a person pays an instrument on a forged indorsement. 
C)  differs from conversion of personal property with respect to the applicable laws. 
D)  occurs if it does not lack indorsement necessary for negotiation.

Question 9

A signature that is not "authorized" when it is initially put on an instrument cannot be ratified later by the person represented.

Accepted Answer

A) True 
 B)False

Question 10

An indorser's liability is discharged if the check is not presented within _____ after the endorsement.

Accepted Answer

A)  15 days 
B)  14 days 
C)  30 days 
D)  48 hours 
A)  15 days 
B)  14 days 
C)  30 days 
D)  48 hours

Exam 40: Liability of Parties

No person is contractually liable on a negotiable instrument unless she or her authorized agent has signed it and the signature is binding on the represented person.

The terms of the contract of the parties to a negotiable instrument are set out in:

Gabrielle borrows $1,000 from Frank to pay for school and gives Frank a note for that amount.Frank wants Gabrielle's father to sign as an accommodation party.Gabrielle's father signs below Gabrielle's signature on the fall of the note.Which of the following statements is true of this case?

Which of the following statements is true of liability on negotiable instruments?

Warranties do not depend on presentment,dishonor,and notice but may be utilized before presentment has been made.

Maya stole a check from Orhan payable to the order of Orhan.Maya forged Orhan's signature and presented the check for payment at Winston Bank,which honored the check.If Orhan sues Winston Bank for the amount of the check,under what theory,can Orhan recover the funds from the bank?

When an incomplete instrument is completed after it has left the drawer's hands,a holder in due course can:

Conversion of an instrument:

A signature that is not "authorized" when it is initially put on an instrument cannot be ratified later by the person represented.

An indorser's liability is discharged if the check is not presented within _____ after the endorsement.

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Propertypart Two Contracts

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remediespart Three Sales

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contractspart Four Agency and Employment

The Agency Relationship-Creation, duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws-Part Five Business Organizations

Which Form of Business Organization

Partnerships

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountantspart Six Property

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance-Part Seven Commercial Paper

Negotiable Instruments

Negotiation and Holder in Due Course

Checks and Electronic Fund Transfers-Part Eight Credit Transactions

Introduction to Security

Security Interests in Personal Property

Bankruptcy-Part Nine Government Regulation

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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