Deck 24: D: The Function Creation of Negotiable Instruments

Question 1

When possible,Sunee pays recurring monthly bills through automatic bank transfers and person-to-person payments to e-mail addresses or cell phone numbers.Compared to the use of paper checks,Sunee's payment methods

A)aid sustainability.
B)hurt sustainability.
C)will never affect sustainability.
D)are poised to take a step toward sustainability.

Answer 1

A

Question 2

Orville sends Percy a certified check for $5,000.Percy deposits the check into his account at Quantum Bank.The next business day,the bank confirms a $5,000 increase in Percy's account.He then wires Orville $500 for "fees." Later,the bank discovers that the check is counterfeit.On these facts,the bank can deduct from Percy's account

A)$5,500.
B)$5,000.
C)$500.
D)0.

Answer 2

A

Question 3

Huey signs a promissory note in reliance on Ian's assurance that it is not a note.Ian negotiates the note to Jinx Collection Agency,which is a holder in due course (HDC)of the note.When Jinx tries to collect,Huey refuses to pay.Under the HDC doctrine,the loss falls on

A)Huey only.
B)Huey and Jinx equally.
C)Huey or Jinx,depending on which party can afford the loss.
D)Jinx only.

Answer 3

A

Question 4

State Bank's policy requires that indorsements on checks exactly match the names of the payees.Tovar,an employee of United Company,issues and indorses several payroll checks in the names of former employees and deposits them into her account at State.United files a suit against State to recover the funds.Most likely to suffer the loss is

A)State Bank on the basis of bad faith.
B)Tovar on the ground that she was a fictitious payee.
C)United Company for failing to monitor its employee.
D)the employees in whose names the checks were issued and indorsed.