Exam 21: Negotiable Instruments: Transferability Liability

Jill, in good faith and for value, gets from Kiley a negotiable bearer in?stru?ment. Jill does not know that Kiley stole the instrument. Jill is

A check "payable to the order of bearer" is neither an order instrument nor a bearer instrument.

Cash National Bank is an HDC of a note for $1,000 on which there is the forged signature of "Dudley." If sued on the note by Cash

On a trade acceptance, the drawer is also the payee.

Primary liability is unconditional.

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

Entrepreneur Auto Rentals owes Sole Saver Auto Dealership $2,000. Entrepreneur executes a note to Sole Saver as security for the debt. This security

An instrument that states simply "I.O.U." is not negotiable.

Efron transfers an instrument to First Citizens Bank. This is not a negotiation unless

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

A personal check cannot be a negotiable instrument.

Burt, a mentally impaired person, is asked by Carl to sign a piece of pa?per that Carl says is an autograph book. In fact, the document is a note. If later sued on the note by an HDC

Muni Investment Company signs a check payable to Enterprise Lenders, Inc., to buy a promissory note executed by Fallow Corporation. This check

The good faith requirement applies to both the holder and the transferor.

A person who transfers an instrument for consideration makes certain warranties to the transferee.

A fictitious payee is a payee on a negotiable instrument whom the maker or drawer does not intend to have an interest in the instrument.

A check is not negotiable if it is payable on demand.

An instrument "payable to bearer" is negotiated by delivery.

Sarah has a checking account at Secure Bank. Sarah buys her roommate Sophie's two tickets to a Broadway musical for $200. Sarah writes Sophie a check for the tickets. In this situation, Secure Bank is the

To buy a stuffed cow, Ken executes a check "pay to Laura or bearer" and gives it to Laura, who does not own a stuffed cow. This check is