Exam 22: Creation of Negotiable Instruments

A ________ is an exception in promissory notes,as it does not require the maker's unconditional and affirmative promise to pay.

In a draft transaction,the drawee is the party who ________.

A fundamental requirement for a negotiable instrument is that it must ________.

Who is the drawee of a check?

Article 3 of the Uniform Commercial Code (UCC)governs the use of negotiable instruments.

Acceptance of drafts can be done orally.

What is a trade acceptance?

A two-party negotiable instrument that is a special form of note created when a person deposits money at a financial institution in exchange for the institution's promise to pay back the amount of the deposit plus an agreed-on rate of interest upon the expiration of a set time period agreed upon by the parties is known as a ________.

Negotiable instruments help in creating a credit economy.

An extension clause allows the date of maturity of an instrument to be extended into the future.

A(n)________ is a clause in an instrument that allows the payee or holder to speed up payment of the principal amount of the instrument,plus accrued interest,upon the occurrence of an event.

A negotiable instrument must be in writing in order to be considered valid.

A promissory note may only be a two-party instrument.

An acknowledgement of debt is sufficient to consider a promissory note as a negotiable instrument.

Once an appointed authorized representative signs a negotiable instrument,while unambiguously disclosing his or her agency status,and the identity of the maker or drawer,then ________.

A trade acceptance is legally a two-party transaction.

Which one of the following is a three-party transaction?

A ________ is a distinct form of draft drawn on a financial institution and payable on demand.

Which of the following is true of a bearer paper?

Instruments that are payable on demand are called order instruments.