Exam 26: Negotiable Instruments: Negotiability and Transferability

Which of the following is true regarding simple contracts as compared to negotiable instruments?

What does the term "float" in banking reference?

Documents used as payments to facilitate commercial transactions were originally generically called ____.

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 true regarding negotiable instruments in the European Union?

Before Phil endorsed the check it was a[n] ______ instrument; and after he endorsed it, the check was a[n] _____ instrument.

With a[n] ______ instrument, payment can be made only at a specific time designated in the future.

A certificate of deposit is a ______ of the bank.

When a specific payee is named in an instrument, the instrument is known as a[n] _____ instrument.

"Yard Mowing." Paula agreed to mow John's yard once a week for $50 per week throughout the summer. Paula, however, was having trouble getting her money from John. On one occasion, he in handwriting gave her in IOU saying "I, John Jones, owe Paula Smith $50." A couple of weeks later, John did not have the money to pay Paula what he owed her, and he handwrote the following on a piece of paper and gave it to her: "I, John Jones, promise to pay Paula Smith or to bearer, the sum of $100 on Monday, July 22, 2013." Paula quit mowing John's yard; and, disgusted with John, Paula assigned both documents to Vince. When Vince presented the documents to John, John refused to pay on the basis that after inspecting the yard, he decided that Paula was doing a poor job. Vince told him the documents constituted negotiable instruments, but John pointed out that he had not signed the documents with his signature at the end. -Considering only the issue of terminology, not the issue of handwriting or whether Paula properly performed, which of the following is true regarding whether the language "I, John Jones, owe Paula Smith $50" is insufficient to establish elements required for a negotiable instrument?

Which of the following was the ruling of the court in the Case Opener regarding the gambler who wrote bad checks to a casino to purchase markers and then tried to avoid payment on the basis of an oral agreement by which a casino host told the gambler that he already had sufficient remaining casino credit to receive the markers?

What two characteristics must a written document have in order to satisfy the requirement that a negotiable instrument be in writing?

Which of the following is known as a substitute for cash?

Under the UCC which of the following statements is sufficient to make a promise or order to pay conditional?

Which of the following does not satisfy the requirement that to be negotiable an instrument must be payable at a time certain or on demand?

If an instrument is silent as to the time of payment, which of the following is assumed by the UCC?

Which of the following is true when an instrument fails to meet the technical requirements necessary to qualify as a negotiable instrument?

"Book Payment." Molly and Pat signed a contract providing that "Pat will furnish the correct used business law book for use in Molly's business law class; and on August 15, 2013, Molly promises to pay Pat $50 for the book." Molly took the book and planned to pay Pat. Meanwhile, Pat properly assigned the contract Molly had signed to Jack. When Molly went to class, however, she discovered that the book was the incorrect book. When Jack asked Molly for payment, Molly refused. Molly told Jack that the book was useless to her and that she was not paying either him or Pat anything for it. Jack told Molly that he had an enforceable assignment in the form of a negotiable instrument and that he could collect regardless of whether the book was useless. Molly did not believe him. Since she was trying to save money on books, she also agreed to buy Tim's U.S. history book for $40. She had an oral agreement with Tim that he would give her the book and that she would pay him in three days. This time Molly got the right book. Tim, in writing, properly assigned the right to the $40 payment to Richard. Richard asked Molly for the money. Molly admitted her agreement with Tim but told Richard that she was not going to pay him because he did not have a negotiable instrument. Molly also purchased a communications book from Sam promising in writing to give him, to his order, a DVD she had in return the next day. -Which of the following is true regarding Jack's claim that he had a negotiable instrument and could collect from Molly?

Suzanne arranged with ABC Bank for a revolving line of credit up to $50,000 for her antique shop. The bank also required that she provide a promissory note promising payment of $50,000 to the bank or as much as may be outstanding in amounts owed to the bank payable on demand. The note allowed for partial early prepayment and for interest after default. A few months later, although Suzanne was not in default, the bank canceled the line of credit and demanded payment of all amounts due based on the promissory note. If the reasoning of the case in the text Reger Development, LLC v. National City Bank is followed, which of the following is the most likely result of the dispute between Suzanne and ABC Bank?

All negotiable documents may be in electronic format.