Exam 14: Negotiable Instruments

Refer to Fact Pattern 14-2. On this instrument, LNG is​

Sergio makes a gift of a check to Todd who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Todd is​

A holder cannot become an HDC if he or she has notice of any claim to the instrument or defense against it.

Gwen deposits $6,000 with Hearthstone Bank on July 1, 2016. Hearthstone promises to repay Gwen the $5,000 plus 2 percent annual interest on July 1, 2021. Hearthstone issued to Gwen​

Emily writes and signs a check payable to "Festival Cinema." Georg, Festival's manager, indorses the check "For deposit only." This is

A check is a time instrument because it is payable in due time.

Refer to Fact Pattern 14-1. Erin's check is most likely​

A maker is secondarily liable on an instrument.

Daria writes a check to Education Loan Management, Inc., that is drawn on Daria's account at First Federal Bank. If the bank does not accept the check, liability for its amount is on​

O'Malley negotiates an order instrument to Phil by​

Alvin signs a promissory note payable to the order of Borrow & Spend Loan Company. The note states that it is payable "with interest at the legal rate." This note is

Warranty liability arises only from a transferor's signature.

A negotiable instrument can only be transferred by negotiation.

Lindsey, an accountant for Madison & Monroe, acquires a negotiable instrument from Norma by promising to pay its face value in thirty days. Lindsey acquires the status of an HDC when she​

Mort transfers an instrument to Neal. This is a negotiation if the transfer is​

Under the fictitious payee rule, the payee's indorsement is not treated as a forgery.

Fiona writes a check "pay to the order of Gerri" drawn on Fiona's account at Home & Farm Bank. Gerri presents the check for payment to Home & Farm, which accepts it. Primarily liable on the check is​

An imposter's indorsement on an instrument is never effective against its drawer or maker.

Builders Exchange, Inc., issues an instrument in favor of Custom Construction Company. For the instrument to be negotiable, it must

A time draft is payable at a definite future time.