Exam 22: Creation of Negotiable Instruments

The Uniform Commercial Code (UCC) signature requirement indicates that a negotiable instrument must be signed by ________.

A clause in an instrument that allows the date of maturity of the instrument to be prolonged to sometime in the future is referred to as the ________.

The creation of a negotiable instrument is known as negotiation.

A ________ is a three-party instrument that is an unconditional written order by one party that orders a second party to pay money to a third party.

Rubber-stamps are not recognized as signing instruments under the Uniform Commercial Code (UCC).

How does an authorized representative's signature work for negotiable instruments?

A(n) ________ is a clause in an instrument that permits the maker to pay the amount due prior to the date of the instrument.

An extension clause allows the date of maturity of an instrument to be extended into the future.

Roger, a lawyer, borrowed money from Jax to start a business. He gave a promissory note to Jax promising to pay the money back anytime within the next five years. But in order to accept the note, Jax demanded a security deposit. Roger gave the gold that he owned as security. Roger in turn demanded that a specific clause be added to the promissory note to allow faster repayment of the loan in case he inherited money within the next five years. But even after five years, Roger was unable to complete payment. He made a new promissory note promising to finish payment within the next year, and promised to provide free legal service to Jax for the next two years. Which of the following clause did Roger ask to add in the first promissory note?

The Uniform Commercial Code (UCC) signature requirement indicates that a negotiable instrument must be signed by the drawer if it is a certificate of deposit.

The ________ requirement of negotiable instruments says that negotiable instruments must be able to be easily transported between areas.

A ________ is a distinct form of draft drawn on a financial institution and payable on demand.

The financial institution upon which a check is written is the payee of a check.

A prepayment clause allows the payee or holder to accelerate payment of the principal amount of an instrument.

Roger, a lawyer, borrowed money from Jax to start a business. He gave a promissory note to Jax promising to pay the money back anytime within the next five years. But in order to accept the note, Jax demanded a security deposit. Roger gave the gold that he owned as security. Roger in turn demanded that a specific clause be added to the promissory note to allow faster repayment of the loan in case he inherited money within the next five years. But even after five years, Roger was unable to complete payment. He made a new promissory note promising to finish payment within the next year, and promised to provide free legal service to Jax for the next two years. What kind of promissory note did Jax secure from Roger for the original amount?

In a certificate of deposit, the depositor is the payee.

Which one of the following is a three-party instrument?

A maker or drawer can appoint an agent to sign a negotiable instrument on his or her behalf.

A fundamental requirement for a negotiable instrument is that it must ________.

Which of the following is true of a promissory note?