Question 1

DigiTech Corporation pays its employees every two weeks.Eve gets her paycheck,indorses the back ("Eve Anderson"),and,on her lunch hour,goes to cash it at DigiTech's bank,First State Bank.On the street,in a crowd,she loses the check.Greg Smith finds it.Has the check been nego?tiated to Greg? Greg signs the back of the check beneath Eve's signature and cashes it.What might Eve have done to avoid this loss?

Accepted Answer

The answer of DigiTech Corporation pays its employees every two...

Question 2

An unqualified indorsement does not guarantee payment of an instrument.

Accepted Answer

A) True 
 B)False

Question 3

A demand instrument is overdue on the day after its date.

Accepted Answer

A) True 
 B)False

Question 4

A blank indorsement does not specify a particular indorsee.

Accepted Answer

A) True 
 B)False

Question 5

Yves negotiates an instrument to Zachary.Negotiation is the transfer of an instrument

Accepted Answer

A) for valuable consideration under a contract. 
B) in a form and by a means that makes the transferee a holder. 
C) pursuant to preliminary contract discussions. 
D) without the payment of a recognized medium of exchange.

Question 6

Rayette transfers a draft by signing it and delivering it to Suki.Suki is

Accepted Answer

A) a delivery person. 
B) a draftee. 
C) an indorsee. 
D) a promisee.

Question 7

A transfer of a negotiable instrument can give a holder more rights than its prior possessor.

Accepted Answer

A) True 
 B)False

Question 8

A bearer instrument can be converted into an order instrument through indorsement.

Accepted Answer

A) True 
 B)False

Question 9

A holder takes an instrument for value by performing the promise for which the instrument was issued.

Accepted Answer

A) True 
 B)False

Question 10

Fact Pattern 25-1B 
Belle obtains a check payable to her order from Charmayne.Belle signs the back and adds the notation "without recourse."
-Refer to Fact Pattern 25-1B.After Belle signs the back and adds the notation "without recourse," she adds "Pay to Desiree." This constitutes

Accepted Answer

A) a blank qualified indorsement. 
B) a special qualified indorsement. 
C) a restrictive indorsement. 
D) none of the choices.

Question 11

A person who takes a negotiable instrument from a thief may become an HDC.

Accepted Answer

A) True 
 B)False

Question 12

A loss that results from a well-crafted forgery usually falls on the party whose signature was forged.

Accepted Answer

A) True 
 B)False

Question 13

Joan signs a note that states,"Payable in thirty days." The note is dated March 2.Kent buys the note on April 3.Is Kent an HDC of the note? Explain.

Accepted Answer

The answer of Joan signs a note that states,"Payable in...

Question 14

A person who does not qualify as an HDC but who derives his or her title through an HDC can acquire the rights and privileges of an HDC.

Accepted Answer

A) True 
 B)False

Question 15

Edie is the payee of a bearer instrument-a promissory note in the amount of $1,000.Frank offers to irrigate Edie's ranch next week in ex?change for the note.Edie agrees and delivers the note to Frank.Frank is

Accepted Answer

A) an HDC,because he promised to perform services at a future date. 
B) not an HDC,because he did not take the instrument without notice. 
C) not an HDC,because he did not acquire the instrument in good faith. 
D) not an HDC,because he did not yet give value for the instrument.

Question 16

A negotiable instrument cannot be transferred by assignment.

Accepted Answer

A) True 
 B)False

Question 17

A holder cannot become an HDC unless hr or she has no?tice of any claim to the instrument or defense against it.

Accepted Answer

A) True 
 B)False

Question 18

Fact Pattern 25-1B 
Belle obtains a check payable to her order from Charmayne.Belle signs the back and adds the notation "without recourse."
-Refer to Fact Pattern 25-1B.When Belle signs the back and adds the notation "without recourse," the check becomes

Accepted Answer

A) a bearer instrument. 
B) an order instrument. 
C) a promissory note. 
D) a nonnegotiable instrument.

Question 19

Vladimir negotiates a bearer instrument to Wendy by

Accepted Answer

A) assignment. 
B) delivery. 
C) presenting it in response to a demand by Wendy. 
D) promising to pay.

Question 20

Finest Office Company employs General Construction,Inc.(GCI),to reno?vate an office and signs a note for $10,000 payable to GCI.GCI breaches the contract,but sells the note for $5,000 to Happy Collection Agency,which knows that GCI has not performed.Happy is an HDC of the note in the amount of

Accepted Answer

A) $0. 
B) $5,000. 
C) $10,000. 
D) $15,000.

Exam 25: A: Transferability and Holder in Due Course

An unqualified indorsement does not guarantee payment of an instrument.

A demand instrument is overdue on the day after its date.

A blank indorsement does not specify a particular indorsee.

Yves negotiates an instrument to Zachary.Negotiation is the transfer of an instrument

Rayette transfers a draft by signing it and delivering it to Suki.Suki is

A transfer of a negotiable instrument can give a holder more rights than its prior possessor.

A bearer instrument can be converted into an order instrument through indorsement.

A holder takes an instrument for value by performing the promise for which the instrument was issued.

Fact Pattern 25-1B Belle obtains a check payable to her order from Charmayne.Belle signs the back and adds the notation "without recourse." -Refer to Fact Pattern 25-1B.After Belle signs the back and adds the notation "without recourse," she adds "Pay to Desiree." This constitutes

A person who takes a negotiable instrument from a thief may become an HDC.

A loss that results from a well-crafted forgery usually falls on the party whose signature was forged.

Joan signs a note that states,"Payable in thirty days." The note is dated March 2.Kent buys the note on April 3.Is Kent an HDC of the note? Explain.

A person who does not qualify as an HDC but who derives his or her title through an HDC can acquire the rights and privileges of an HDC.

Edie is the payee of a bearer instrument-a promissory note in the amount of $1,000.Frank offers to irrigate Edie's ranch next week in ex?change for the note.Edie agrees and delivers the note to Frank.Frank is

A negotiable instrument cannot be transferred by assignment.

A holder cannot become an HDC unless hr or she has no?tice of any claim to the instrument or defense against it.

Fact Pattern 25-1B Belle obtains a check payable to her order from Charmayne.Belle signs the back and adds the notation "without recourse." -Refer to Fact Pattern 25-1B.When Belle signs the back and adds the notation "without recourse," the check becomes

Vladimir negotiates a bearer instrument to Wendy by

Finest Office Company employs General Construction,Inc.(GCI) ,to reno?vate an office and signs a note for $10,000 payable to GCI.GCI breaches the contract,but sells the note for $5,000 to Happy Collection Agency,which knows that GCI has not performed.Happy is an HDC of the note in the amount of