Question 1

A negotiable instrument must be a conditional order to pay.

Accepted Answer

A) True 
 B)False  False

Question 2

A ______ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account.

Accepted Answer

A)  Promissory contract 
B)  Certificates of deposit 
C)  Note 
D)  Check 
E)  Time instrument 
A)  Promissory contract 
B)  Certificates of deposit 
C)  Note 
D)  Check 
E)  Time instrument D

Question 3

Order paper must be delivered but not endorsed in order to be negotiated.

Accepted Answer

A) True 
 B)False  False

Question 4

The customer cannot order a stop payment on an electronic fund transfer.

Accepted Answer

A) True 
 B)False

Question 5

A note is a promise, by the maker of the note, to pay a payee.

Accepted Answer

A) True 
 B)False

Question 6

A bank involved in the check collection process may only be classified as one type of bank during the entire process.

Accepted Answer

A) True 
 B)False

Question 7

___________ is a person receiving an endorsement.

Accepted Answer

A)  Allonge 
B)  A transferor 
C)  A transferee 
D)  An endorser 
E)  An endorsee 
A)  Allonge 
B)  A transferor 
C)  A transferee 
D)  An endorser 
E)  An endorsee

Question 8

Generally, assuming no negligence on the part of the victim, when an endorsement on a check has been forged and properly reported to the bank, which party is the party ultimately liable for the loss?

Accepted Answer

A)  The drawer. 
B)  The first party to accept the forged instrument. 
C)  The first legitimate endorser of the instrument. 
D)  The bank of the first party to accept the forged instrument. 
E)  The bank of the drawer even if proper notice was given of the forgery. 
A)  The drawer. 
B)  The first party to accept the forged instrument. 
C)  The first legitimate endorser of the instrument. 
D)  The bank of the first party to accept the forged instrument. 
E)  The bank of the drawer even if proper notice was given of the forgery.

Question 9

Anne orally promises Judy that in return for Judy washing Anne's dog, Anne unconditionally promises to pay Judy $50 the next Wednesday. Is a contract formed, is it negotiable, and why or why not?

Accepted Answer

It appears that a contract is formed bec

Question 10

Which of the following was the result on appeal in New Wave Technologies, Inc. v. Legacy Bank of Texas, the case in the text involving whether endorsements of both payees were required in order for the bank involved to properly release funds on a check made out to "Maxim Solutions Group/New Wave Techn" and providing on the back that "Each Payee Must Endorse Exactly As Drawn"?

Accepted Answer

A)  That under the UCC the slash meant "and" resulting in the endorsements of both payees being required before the bank could properly release funds on the check. 
B)  That the slash was ambiguous and would, therefore, be interpreted to mean "and" resulting in the endorsements of both payees being required before the bank could properly release funds on the check. 
C)  That the slash was ambiguous and would, therefore, be interpreted to mean "or" resulting in the endorsement of only one payee being required before the bank could properly release funds on the check. 
D)  That the slash was ambiguous resulting in the check being non-negotiable regardless of how many signatures were on it. 
E)  That while the check would normally be interpreted to require only one payee, the statement on the back that "Each Payee Must Endorse Exactly As Drawn" resulted in the signature of both payees being required before the bank could properly release funds. 
A)  That under the UCC the slash meant "and" resulting in the endorsements of both payees being required before the bank could properly release funds on the check. 
B)  That the slash was ambiguous and would, therefore, be interpreted to mean "and" resulting in the endorsements of both payees being required before the bank could properly release funds on the check. 
C)  That the slash was ambiguous and would, therefore, be interpreted to mean "or" resulting in the endorsement of only one payee being required before the bank could properly release funds on the check. 
D)  That the slash was ambiguous resulting in the check being non-negotiable regardless of how many signatures were on it. 
E)  That while the check would normally be interpreted to require only one payee, the statement on the back that "Each Payee Must Endorse Exactly As Drawn" resulted in the signature of both payees being required before the bank could properly release funds.

Question 11

Susie Smith signed a note agreeing to pay, "Annie Greene, Mary Hodge," $1,000. The payment was for painting her house. An issue with the note was that it spelled Annie's last name, "Greene," whereas Annie spells it simply, "Green." Annie and Mary had a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the note on the back, "Annie Green," and presented it to Bill Brown to satisfy a debt that she owed him. Bill Brown endorsed the note on the back and took it to the bank for payment. Mary is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and also because Mary did sign it. Which of the following is true regarding Mary's claim that the endorsement by Annie was illegal because the note misspelled Annie's name?

Accepted Answer

A)  Mary is correct. 
B)  Mary is correct, but only because Annie signed the note, "Green," instead of "Greene," as such was on the note. 
C)  Mary is correct, but only because two payees are listed. 
D)  Mary is incorrect. 
E)  Mary is incorrect unless she can prove that Susie intentionally and purposefully spelled the name wrong to prevent negotiation. 
A)  Mary is correct. 
B)  Mary is correct, but only because Annie signed the note, "Green," instead of "Greene," as such was on the note. 
C)  Mary is correct, but only because two payees are listed. 
D)  Mary is incorrect. 
E)  Mary is incorrect unless she can prove that Susie intentionally and purposefully spelled the name wrong to prevent negotiation.

Question 12

Which of the following is a promise made by a bank to pay a payee a certain amount of money at a future time?

Accepted Answer

A)  A note 
B)  A draft 
C)  A novation 
D)  A check 
E)  A certificate of deposit 
A)  A note 
B)  A draft 
C)  A novation 
D)  A check 
E)  A certificate of deposit

Question 13

The UCC prohibits bank customers from postdating checks.

Accepted Answer

A) True 
 B)False

Question 14

Negotiable instruments payable to whoever possesses them are known as _______________ instruments.

Accepted Answer

A)  Demand 
B)  Order 
C)  Transactional 
D)  Bearer 
E)  Payor 
A)  Demand 
B)  Order 
C)  Transactional 
D)  Bearer 
E)  Payor

Question 15

In the event of a misspelled name, how may the holder endorse the document?

Accepted Answer

A)  Only with the misspelled name. 
B)  Only with the holder's actual name. 
C)  With the holder's actual name or with the misspelled name. 
D)  Endorsement is impossible in such a situation. 
E)  With the misspelled name and also with a statement indicating to any later holder what the correct spelling should have been. 
A)  Only with the misspelled name. 
B)  Only with the holder's actual name. 
C)  With the holder's actual name or with the misspelled name. 
D)  Endorsement is impossible in such a situation. 
E)  With the misspelled name and also with a statement indicating to any later holder what the correct spelling should have been.

Question 16

Set forth the six requirements for an instrument to be negotiable.

Accepted Answer

The six requirements for an instrument t

Question 17

Which of the following is false regarding requirements for an instrument to be negotiable?

Accepted Answer

A)  The instrument must be a written document. 
B)  The instrument must be signed by the creator of the instrument at the end of the instrument. 
C)  The instrument must have an unconditional promise or order to pay. 
D)  The amount to be paid in the instrument must be a sum certain in money. 
E)  All of these are false. 
A)  The instrument must be a written document. 
B)  The instrument must be signed by the creator of the instrument at the end of the instrument. 
C)  The instrument must have an unconditional promise or order to pay. 
D)  The amount to be paid in the instrument must be a sum certain in money. 
E)  All of these are false.

Question 18

With a[n] ______________ instrument, the payee or subsequent holder can demand actual payment at any time.

Accepted Answer

A)  Time 
B)  Demand 
C)  Recourse 
D)  Nonrecourse 
E)  Immediate 
A)  Time 
B)  Demand 
C)  Recourse 
D)  Nonrecourse 
E)  Immediate

Question 19

Which of the following is the party who possesses a negotiable instrument payable to the party or to the bearer of the instrument?

Accepted Answer

A)  A holder. 
B)  A deliverer. 
C)  A transferor. 
D)  An acknowledger. 
E)  An orderee. 
A)  A holder. 
B)  A deliverer. 
C)  A transferor. 
D)  An acknowledger. 
E)  An orderee.

Question 20

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

Accepted Answer

A)  Cashier's check 
B)  Traveler's check 
C)  Certified check 
D)  Cashier's checks, traveler's checks, and certified checks 
E)  A cashier's check and a traveler's check, but not a certified check 
A)  Cashier's check 
B)  Traveler's check 
C)  Certified check 
D)  Cashier's checks, traveler's checks, and certified checks 
E)  A cashier's check and a traveler's check, but not a certified check

Exam 16: Sales and Lease Contracts: Performance, Warranties, and Remedies

A negotiable instrument must be a conditional order to pay.

A ______ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account.

Order paper must be delivered but not endorsed in order to be negotiated.

The customer cannot order a stop payment on an electronic fund transfer.

A note is a promise, by the maker of the note, to pay a payee.

A bank involved in the check collection process may only be classified as one type of bank during the entire process.

___________ is a person receiving an endorsement.

Generally, assuming no negligence on the part of the victim, when an endorsement on a check has been forged and properly reported to the bank, which party is the party ultimately liable for the loss?

Anne orally promises Judy that in return for Judy washing Anne's dog, Anne unconditionally promises to pay Judy $50 the next Wednesday. Is a contract formed, is it negotiable, and why or why not?

Which of the following is a promise made by a bank to pay a payee a certain amount of money at a future time?

The UCC prohibits bank customers from postdating checks.

Negotiable instruments payable to whoever possesses them are known as _______________ instruments.

In the event of a misspelled name, how may the holder endorse the document?

Set forth the six requirements for an instrument to be negotiable.

Which of the following is false regarding requirements for an instrument to be negotiable?

With a[n] ______________ instrument, the payee or subsequent holder can demand actual payment at any time.

Which of the following is the party who possesses a negotiable instrument payable to the party or to the bearer of the instrument?

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

An Introduction to the Fundamentals of Dynamic Business Law

Business Ethics and Social Responsibility

The Us Legal System and Alternative Dispute Resolution

Administrative Law

Constitutional Law

Criminal Law and Business

Tort Law

Real, Personal, and Intellectual Property

Introduction to Contracts and Agreement

Consideration

Capacity and Legality

Reality of Assent

Contracts in Writing and Third-Party Contracts

Discharge and Remedies

Formation and Performance of Sales and Lease Contracts

Negotiable Instruments: Negotiability and Transferability

Holder in Due Course, Liability, and Defenses

Secured Transactions and Bankruptcy

Agency and Liability to Third Parties

Forms of Business Organization

Corporations: Formation and Organization

Securities Regulation

Employment and Discrimination Law

Consumer Law

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