Exam 22: The Essentials of Negotiability

Oren signs an instrument payable to the order of Pay-Out Loans, Inc., "on or before" June 15.  This instrument is

Avril receives a payroll check from Business Solutions, Inc., and indorses it by signing her name on the back of the check. This is

A promissory note is a negotiable instrument that functions as a substitute for cash.

A time instrument is payable at a future date.

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

Negotiable instruments must be in written form.

Fact Pattern 22-2 LNG Corporation and Midstates Utility Company enter a contract for a sale of liquefied natural gas by LNG to Midstates. LNG draws a draft unconditionally ordering Midstates Utility to pay $50,000 to LNG's order in sixty days. Midstates Utility signs and dates the draft. Refer to Fact Pattern 22-2. This instrument is

Fred has six nieces, ages five to sixteen. He writes an order instrument for $50 that states "Pay to the order of my niece." The order instrument is

Indorsements are required whenever the instrument being negotiated is classified as a bearer instrument.

With cashier's checks the bank is both the drawer and the drawee.

A holder is a person who is legally entitled to payment on an instrument.

Ryan negotiates an order instrument to Selina by

A blank indorsement does not specify a particular indorsee.

Petra signs a check payable to Quincy, who indorses the back, gives it to Regional Credit Union, and receives cash. The transfer of the check from Quincy to the credit union is

With respect to negotiability, the location of a signature on a document is unimportant .

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

Ben signs a promissory note for $1,500 in favor of Community College. The note is undated but specifies that it is "payable one month after date." This note is

Fact Pattern 22-3 To borrow the funds to pay tuition at State College, Tia signs an instrument unconditionally promising to pay to "United Credit Company" $17,500 with interest in installments with the final payment due June 30, 2028. Refer to Fact Pattern 22-3. The instrument that Tia signed is most likely

Kelly signs an instrument in favor of Leo that states it is "subject to a certain agreement between Kelly and Mona." This instrument is

On a sheet of paper, Elle writes, without her signature, "I acknowledge that I owe Frank $600, payable out of the proceeds of the sale of my car, a 2005 Honda Civic, which I promise to advertise 'For Sale' next week. Payment is to be made on or before six months from today." What type of instrument is this? Is it negotiable? If not, why not?