Question 1

If Jay signs Mila's name to a negotiable instrument without Mila's authorization or approval:

Accepted Answer

A)  the signature is not effective as the signature is of the unauthorized signer. 
B)  the signature cannot be ratified later by the person represented. 
C)  the signature does not bind the person whose name appears. 
D)  Jay is not liable on the check.

Question 2

The drawee does not have liability on the instrument until it _____ the instrument.

Accepted Answer

A)  transfers 
B)  signs 
C)  negotiates 
D)  makes

Question 3

UCC section 3-604 allows for the liability associated with a negotiable instrument to be canceled by the person entitled to enforce the instrument.

Accepted Answer

A) True 
 B)False

Question 4

Signing a promissory note is an example of establishing primary liability in a negotiable instrument.

Accepted Answer

A) True 
 B)False

Question 5

Salmond signs a note for the purpose of lending credit to John.Salmond also makes his father Richard sign the note because of his shaky financial condition.This indicates that Richard has signed the note in the capacity of a(n):

Accepted Answer

A)  drawer. 
B)  accommodation party. 
C)  drawee. 
D)  indorser.

Question 6

A transferor of a negotiable instrument for consideration warrants to his transferee that the negotiable instrument has not been altered.

Accepted Answer

A) True 
 B)False

Question 7

Presentment warranties are made by any prior transferor of the instrument at the time the person transfers the instrument.

Accepted Answer

A) True 
 B)False

Question 8

All signatures on a negotiable instrument are guaranteed to be treated as authentic due to what type of warranty?

Accepted Answer

A)  Transfer warranty 
B)  International commerce warranty 
C)  Principal agent warranty 
D)  Invoice protection warranty

Question 9

A transfers a negotiable note to B,who in turn transfers it to C.Under what conditions has A made a transfer warranty to C?
The transfer must be for consideration.And if the transferor indorses,he makes the transfer warranties to all subsequent transferees.

Accepted Answer

The answer of A transfers a negotiable note to B,who...

Question 10

According to UCC section 3-401 which of the following does NOT constitute a valid signature of a negotiable instrument?

Accepted Answer

A)  A mark on the document 
B)  A word on the document 
C)  Leaving the document intentionally blank 
D)  Printing the name on the document

Exam 33: Liability of Parties

If Jay signs Mila's name to a negotiable instrument without Mila's authorization or approval:

The drawee does not have liability on the instrument until it _____ the instrument.

UCC section 3-604 allows for the liability associated with a negotiable instrument to be canceled by the person entitled to enforce the instrument.

Signing a promissory note is an example of establishing primary liability in a negotiable instrument.

Salmond signs a note for the purpose of lending credit to John.Salmond also makes his father Richard sign the note because of his shaky financial condition.This indicates that Richard has signed the note in the capacity of a(n) :

A transferor of a negotiable instrument for consideration warrants to his transferee that the negotiable instrument has not been altered.

Presentment warranties are made by any prior transferor of the instrument at the time the person transfers the instrument.

All signatures on a negotiable instrument are guaranteed to be treated as authentic due to what type of warranty?

A transfers a negotiable note to B,who in turn transfers it to C.Under what conditions has A made a transfer warranty to C? The transfer must be for consideration.And if the transferor indorses,he makes the transfer warranties to all subsequent transferees.

According to UCC section 3-401 which of the following does NOT constitute a valid signature of a negotiable instrument?