Exam 14: Negotiable Instruments

To finance the purchase of an electric guitar and amplifier from Leon's Guitars, Milo signs an instrument promising to pay to "National Lenders" $1,800 with interest in installments and the final payment due August 15, 2016. To be negotiable, this instrument must include on its face

A holder does not take an instrument for value if he or she gives a negotiable instrument as payment.

Pedro signs an instrument that states it is being executed "as per a contract for the sale of a truckload of almonds dated May 1." This instrument is

A person whose name is forged on an instrument normally has no liability to pay any holder the value of the instrument.

Dishonor occurs if payment of an instrument cannot be obtained within the prescribed time.

Talia, who is not an Urban Bank customer, attempts to cash a check drawn on the bank. The check is considered dishonored if Urban Bank

To be negotiable, an instrument must be payable on demand.

Petra signs a check payable to Quentin, who indorses the back, gives it to Regional Credit Union (RCU), and receives cash. The transfer of the check from Quentin to RCU is​

Vicenzo, in good faith and for value, gets from Wren a check "payable to the order of bearer." Vicenzo does not know, or have reason to know that Wren stole the check. Vicenzo is

Lenora signs a note "payable to the order of Medical Account Collection Agency." Unless Lenora has a valid defense against payment, Lenora's liability on this note is​

An order instrument must identify the payee with certainty.

Negotiating order instruments requires either delivery or indorsement but not both.

Refer to Fact Pattern 14-3. The instrument that Thalia signed is most likely​

On the back of a check payable to Nero, Nero writes "Pay to Odell, without recourse" and signs it. This

With respect to negotiability, a mere reference to another writing or record makes a promise conditional.

One of the transfer warranties is that the instrument has not been altered.

Failure to present an instrument on time is improper presentment.

A symbol can serve as a valid signature.

An unauthorized signature binds the person whose name is signed.

A holder takes an instrument for value by promising to perform in the future.