Question 1

On May 1, Doug signs a check that is payable to the order of Excel Credit Corporation and that is dated July 1. This check is

Accepted Answer

A)  negotiable. 
B)  nonnegotiable, because it is payable to Excel Credit Card Corporation. 
C)  nonnegotiable, because it is postdated. 
D)  nonnegotiable, because it is signed by Doug. 
A)  negotiable. 
B)  nonnegotiable, because it is payable to Excel Credit Card Corporation. 
C)  nonnegotiable, because it is postdated. 
D)  nonnegotiable, because it is signed by Doug.

Question 2

Normally, if the numerical amount and the written amount on a check differ, the words outweigh the figures.

Accepted Answer

A) True 
 B)False

Question 3

A promissory note that states it is payable within ninety days represents an ex?tension of credit by the holder to the debtor.

Accepted Answer

A) True 
 B)False

Question 4

A negotiable instrument serves as a substitute for cash.

Accepted Answer

A) True 
 B)False

Question 5

Fact Pattern 24-2B 
Ewa signs an instrument unconditionally promising to pay to "First State Bank" $5,000 with interest in installments with the final payment due June 1, 2012.
-Refer to Fact Pattern 24-2B. With respect to this instrument, First States Bank is

Accepted Answer

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

Question 6

Fact Pattern 24-1A 
Flik draws a check payable to "GrocMart" to buy groceries.
-Refer to Fact Pattern 24-1A. Flik's check is most likely

Accepted Answer

A)  a certificate of deposit. 
B)  a negotiable instrument. 
C)  a promise to pay. 
D)  a promissory note. 
A)  a certificate of deposit. 
B)  a negotiable instrument. 
C)  a promise to pay. 
D)  a promissory note.

Question 7

The accounting department of Delta Sales Company receives an instru?ment that states, "March 16, 2001. Thirty days after date, I promise to pay to the order of cash, $700 (seven hundred and 00/100 dollars), in Denver, Colorado, with interest at the rate of 7% (seven percent) per year. This in?strument is secured by a contract for the sale of a computer. Due April 15, 2001. [Signed] Edward Jones." What type of instrument is this? Is it nego?tiable? If not, why not?

Accepted Answer

This instrument is a promissory note and

Question 8

Ross signs an instrument using an "R" with a circle around it. With this mark for a signature, the instrument is

Accepted Answer

A)  negotiable. 
B)  nonnegotiable, because an initial does not state the signer's name. 
C)  nonnegotiable, because an initial is not a signature. 
D)  nonnegotiable, because a simple initial implies a lack of binding intent. 
A)  negotiable. 
B)  nonnegotiable, because an initial does not state the signer's name. 
C)  nonnegotiable, because an initial is not a signature. 
D)  nonnegotiable, because a simple initial implies a lack of binding intent.

Question 9

On behalf of First-Rate Capital, Inc., Greg signs an instrument promis?ing to pay $5,000 in gold to Hot Funds, Inc., on May 15. This in?strument is

Accepted Answer

A)  negotiable. 
B)  nonnegotiable, because gold is not a medium of exchange author?ized or adopted by a government as currency. 
C)  nonnegotiable, because it does not recite any consideration. 
D)  nonnegotiable, because it is for an amount of $500 or more. 
A)  negotiable. 
B)  nonnegotiable, because gold is not a medium of exchange author?ized or adopted by a government as currency. 
C)  nonnegotiable, because it does not recite any consideration. 
D)  nonnegotiable, because it is for an amount of $500 or more.

Question 10

To be negotiable, an instrument must include any conditions to payment on its face.

Accepted Answer

A) True 
 B)False

Question 11

An undated instrument is not negotiable.

Accepted Answer

A) True 
 B)False

Question 12

To be negotiable, an instrument must be portable.

Accepted Answer

A) True 
 B)False

Question 13

A signature can consist of initials signed by a party.

Accepted Answer

A) True 
 B)False

Question 14

On a sheet of paper, Elle writes, without her signature, "I acknowledge that I owe Frank $600, payable out of the proceeds of the sale of my car, a 1995 Honda Civic, which I promise to advertise 'For Sale' next week. Payment is to be made on or before six months from today." What type of instrument is this? Is it nego?tiable? If not, why not?

Accepted Answer

This instrument is a promissory note, bu

Question 15

On behalf of Digital Cable Company, Ed signs an instrument in which he promises to deliver 1,000 feet of optic fiber cable to First Internet Bank on March 1. This instrument is

Accepted Answer

A)  negotiable. 
B)  nonnegotiable, because cable is not a medium of exchange author?ized or adopted by a government as currency. 
C)  nonnegotiable, because it does not indicate a specific type of cable. 
D)  nonnegotiable, because it does not recite any consideration. 
A)  negotiable. 
B)  nonnegotiable, because cable is not a medium of exchange author?ized or adopted by a government as currency. 
C)  nonnegotiable, because it does not indicate a specific type of cable. 
D)  nonnegotiable, because it does not recite any consideration.

Question 16

A certificate of deposit may be negotiable even if it does not contain an express promise to pay.

Accepted Answer

A) True 
 B)False

Question 17

Kelly signs an instrument in favor of Leo that states it is "subject to a cer?tain agreement between Kelly and Mona." This instru?ment is

Accepted Answer

A)  negotiable. 
B)  nonnegotiable, because it is made subject to a separate agreement. 
C)  nonnegotiable, because it refers to a separate agreement. 
D)  nonnegotiable, because Kelly and Mona are not the same persons. 
A)  negotiable. 
B)  nonnegotiable, because it is made subject to a separate agreement. 
C)  nonnegotiable, because it refers to a separate agreement. 
D)  nonnegotiable, because Kelly and Mona are not the same persons.

Question 18

USA Oil Corporation signs an instrument that states it is being exe?cuted "in accord with a contract for the purchase of 4,000 barrels of oil dated May 1." This instrument is

Accepted Answer

A)  negotiable. 
B)  nonnegotiable, because information about the sale must be ob?tained from another source. 
C)  nonnegotiable, because it states an express condition to payment. 
D)  nonnegotiable, because the terms of the sale are not clear. 
A)  negotiable. 
B)  nonnegotiable, because information about the sale must be ob?tained from another source. 
C)  nonnegotiable, because it states an express condition to payment. 
D)  nonnegotiable, because the terms of the sale are not clear.

Question 19

Fact Pattern 24-1A 
Flik draws a check payable to "GrocMart" to buy groceries.
-Refer to Fact Pattern 24-1A. With respect to Flik's check, GrocMart is

Accepted Answer

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

Question 20

Karen writes on a piece of paper, "I owe you $600," signs it, and gives it to Lou. This instrument is

Accepted Answer

A)  negotiable. 
B)  nonnegotiable, because it does not include an express promise to pay. 
C)  nonnegotiable, because it does not recite any consideration. 
D)  nonnegotiable, because it does not state any conditions to payment. 
A)  negotiable. 
B)  nonnegotiable, because it does not include an express promise to pay. 
C)  nonnegotiable, because it does not recite any consideration. 
D)  nonnegotiable, because it does not state any conditions to payment.

Exam 24: The Function Creation of Negotiable Instruments

On May 1, Doug signs a check that is payable to the order of Excel Credit Corporation and that is dated July 1. This check is

Normally, if the numerical amount and the written amount on a check differ, the words outweigh the figures.

A promissory note that states it is payable within ninety days represents an ex?tension of credit by the holder to the debtor.

A negotiable instrument serves as a substitute for cash.

Fact Pattern 24-2B Ewa signs an instrument unconditionally promising to pay to "First State Bank" $5,000 with interest in installments with the final payment due June 1, 2012. -Refer to Fact Pattern 24-2B. With respect to this instrument, First States Bank is

Fact Pattern 24-1A Flik draws a check payable to "GrocMart" to buy groceries. -Refer to Fact Pattern 24-1A. Flik's check is most likely

Ross signs an instrument using an "R" with a circle around it. With this mark for a signature, the instrument is

On behalf of First-Rate Capital, Inc., Greg signs an instrument promis?ing to pay $5,000 in gold to Hot Funds, Inc., on May 15. This in?strument is

To be negotiable, an instrument must include any conditions to payment on its face.

An undated instrument is not negotiable.

To be negotiable, an instrument must be portable.

A signature can consist of initials signed by a party.

On behalf of Digital Cable Company, Ed signs an instrument in which he promises to deliver 1,000 feet of optic fiber cable to First Internet Bank on March 1. This instrument is

A certificate of deposit may be negotiable even if it does not contain an express promise to pay.

Kelly signs an instrument in favor of Leo that states it is "subject to a cer?tain agreement between Kelly and Mona." This instru?ment is

USA Oil Corporation signs an instrument that states it is being exe?cuted "in accord with a contract for the purchase of 4,000 barrels of oil dated May 1." This instrument is

Fact Pattern 24-1A Flik draws a check payable to "GrocMart" to buy groceries. -Refer to Fact Pattern 24-1A. With respect to Flik's check, GrocMart is

Karen writes on a piece of paper, "I owe you $600," signs it, and gives it to Lou. This instrument is

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

The Statute of Fraudswriting Requirements

Ethics and Business Decision Making

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crimes

Nature and Terminology

Agreement

Consideration

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

E-Contracts and E-Signatures

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Checks, the Banking System, and E-Money

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Agency Formation and Duties

Liability to Third Parties and Termination

Employment and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporationsformation and Financing

Corporationsdirectors, Officers, Shareholders

Corporationsmerger, Consolidation, Termination

Corporationssecurities Law Corporate Governance

Law for Small Businesses

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Personal Property and Bailments

Real Property and Landlord-Tenant Relationships

Insurance

Wills and Trusts

Professional Liaility and Accountability

International Law in a Global Economy

Legal and Ethical Issues in Business

Legal Issues

Contracts and Business Law

Contracts and Liability

Banking and Payment Systems

Loan Security and Repossession in Credit Transactions

Employment Law and Ethics

Legal Issues in Corporate Governance and Business Operations

Legal and Ethical Issues in Environmental Protection and Consumer Rights

Legal Issues in Property and Land Use