Question 1

Paper payable "on demand" fails the test of negotiability in that it does not contain a specific time.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following is not a reason for the use of negotiable instruments?

Accepted Answer

A) Reduction of the chance of forgery or material alteration 
B) Convenience 
C) Elimination of the risk of loss or theft of cash 
D) Reduction of cost to the federal government of maintaining an adequate supply of currency 
A) Reduction of the chance of forgery or material alteration 
B) Convenience 
C) Elimination of the risk of loss or theft of cash 
D) Reduction of cost to the federal government of maintaining an adequate supply of currency A

Question 3

Akeya sells and delivers goods to Wayne for $10,000.Wayne executes and delivers a negotiable note to Akeya for $10,000 payable to Akeya's order in sixty days.A week later, Akeya duly negotiates the note to Maria.Which of
The following is correct?

Accepted Answer

A) Maria is required to notify Wayne that she has acquired the note from Akeya. 
B) If the goods are defective, Wayne's defense against Akeya is not available against Maria if Maria acquired the note in good faith and for value and had no knowledge of Wayne's defense against Akeya and took the note without reason to question its authenticity. 
C) Maria is not entitled to hold Wayne for the full face amount of the note at maturity if Wayne has a valid defense against Akeya for defective goods regardless of the circumstances surrounding the negotiation of the note to Maria. 
D) If there is a valid defense against Akeya, Maria cannot become a holder in due course when the note is transferred to her. 
A) Maria is required to notify Wayne that she has acquired the note from Akeya. 
B) If the goods are defective, Wayne's defense against Akeya is not available against Maria if Maria acquired the note in good faith and for value and had no knowledge of Wayne's defense against Akeya and took the note without reason to question its authenticity. 
C) Maria is not entitled to hold Wayne for the full face amount of the note at maturity if Wayne has a valid defense against Akeya for defective goods regardless of the circumstances surrounding the negotiation of the note to Maria. 
D) If there is a valid defense against Akeya, Maria cannot become a holder in due course when the note is transferred to her. B

Question 4

Bearer paper is negotiable.

Accepted Answer

A) True 
 B)False

Question 5

A promissory note is an instrument that involves three parties in three capacities.

Accepted Answer

A) True 
 B)False

Question 6

A definite time required for negotiability would NOT be satisfied in which instance?

Accepted Answer

A) Payable on or before January 1, 2015 
B) Payable one week after demand is made 
C) Payable one year from the completion of the building 
D) A dated instrument payable "90 days after date" 
A) Payable on or before January 1, 2015 
B) Payable one week after demand is made 
C) Payable one year from the completion of the building 
D) A dated instrument payable "90 days after date"

Question 7

All but which of the following is required of a negotiable instrument?

Accepted Answer

A) It must be payable only out of a particular fund. 
B) It must contain an unconditional promise to pay a fixed amount in money. 
C) It must be payable on demand or at a fixed future date. 
D) It must be in writing and signed by the maker or drawer. 
A) It must be payable only out of a particular fund. 
B) It must contain an unconditional promise to pay a fixed amount in money. 
C) It must be payable on demand or at a fixed future date. 
D) It must be in writing and signed by the maker or drawer.

Question 8

An incomplete instrument is non-negotiable.However, when it is completed, it may become negotiable.

Accepted Answer

A) True 
 B)False

Question 9

Where both words and numerals are used to describe the amount payable, the numerals will be used to resolve any differences.

Accepted Answer

A) True 
 B)False

Question 10

Which article of the UCC deals with "negotiable instruments"?

Accepted Answer

A) Article 1 
B) Article 2 
C) Article 3 
D) Article 9 
A) Article 1 
B) Article 2 
C) Article 3 
D) Article 9

Question 11

Handwritten words supersede inconsistent typewritten words contained in negotiable instruments.

Accepted Answer

A) True 
 B)False

Question 12

A maker must sign in the lower, right-hand corner of the instrument.

Accepted Answer

A) True 
 B)False

Question 13

Under Revised Article 3, a promise to pay only out of a particular fund will destroy the negotiability of an instrument.

Accepted Answer

A) True 
 B)False

Question 14

Under Revised Article 3, a check which meets all the requirements of being a negotiable instrument except that it is not payable to bearer or order is nevertheless a negotiable instrument.

Accepted Answer

A) True 
 B)False

Question 15

A certificate of deposit differs from a promissory note in that, with a certificate of deposit:

Accepted Answer

A) the maker is always a bank. 
B) there are three parties to the transaction. 
C) the payee of a CD must be paid on demand. 
D) a writing is required. 
A) the maker is always a bank. 
B) there are three parties to the transaction. 
C) the payee of a CD must be paid on demand. 
D) a writing is required.

Question 16

An instrument payable at a fixed time subject to acceleration by the holder is not negotiable.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following would not be considered "money" within the meaning of the Code?

Accepted Answer

A) Diamonds 
B) Mexican pesos 
C) German marks 
D) Nigerian naira 
A) Diamonds 
B) Mexican pesos 
C) German marks 
D) Nigerian naira

Question 18

An instrument paying a fixed amount in Japanese yen is not negotiable; the instrument must be payable in money authorized or adopted by the U.S.as part of its currency.

Accepted Answer

A) True 
 B)False

Question 19

Jones signed a 90-day note promising to pay $1,000 plus interest.The note states interest is to be based on a variable published rate external to the note.The sum the borrower must repay is uncertain; therefore, under Revised Article
3, the note is not negotiable.

Accepted Answer

A) True 
 B)False

Question 20

A written and signed promise by Miller to Baker to deliver 1,000 pounds of flour in 30 days is an example of a negotiable instrument.

Accepted Answer

A) True 
 B)False

Exam 26: Form and Content

Paper payable "on demand" fails the test of negotiability in that it does not contain a specific time.

Which of the following is not a reason for the use of negotiable instruments?

Akeya sells and delivers goods to Wayne for $10,000.Wayne executes and delivers a negotiable note to Akeya for $10,000 payable to Akeya's order in sixty days.A week later, Akeya duly negotiates the note to Maria.Which of The following is correct?

Bearer paper is negotiable.

A promissory note is an instrument that involves three parties in three capacities.

A definite time required for negotiability would NOT be satisfied in which instance?

All but which of the following is required of a negotiable instrument?

An incomplete instrument is non-negotiable.However, when it is completed, it may become negotiable.

Where both words and numerals are used to describe the amount payable, the numerals will be used to resolve any differences.

Which article of the UCC deals with "negotiable instruments"?

Handwritten words supersede inconsistent typewritten words contained in negotiable instruments.

A maker must sign in the lower, right-hand corner of the instrument.

Under Revised Article 3, a promise to pay only out of a particular fund will destroy the negotiability of an instrument.

Under Revised Article 3, a check which meets all the requirements of being a negotiable instrument except that it is not payable to bearer or order is nevertheless a negotiable instrument.

A certificate of deposit differs from a promissory note in that, with a certificate of deposit:

An instrument payable at a fixed time subject to acceleration by the holder is not negotiable.

Which of the following would not be considered "money" within the meaning of the Code?

An instrument paying a fixed amount in Japanese yen is not negotiable; the instrument must be payable in money authorized or adopted by the U.S.as part of its currency.

Jones signed a 90-day note promising to pay $1,000 plus interest.The note states interest is to be based on a variable published rate external to the note.The sum the borrower must repay is uncertain; therefore, under Revised Article 3, the note is not negotiable.

A written and signed promise by Miller to Baker to deliver 1,000 pounds of flour in 30 days is an example of a negotiable instrument.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.