Exam 19: Negotiable Instruments

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

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

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

To be negotiable, an instrument must be payable in money.

Bart, the owner of Clear Cut Corporation, signs an instrument that includes the phrase "payment for this note will be made from the proceeds of next year's timber sale." This instrument is​

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

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

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​

Ray pays Slim in good faith for a promissory note. Slim warrants that the note has not been altered. This is​

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​

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 1995 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?​

A symbol can serve as a valid signature.

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

To properly present a draft for payment, the holder must present it to the drawer.

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

A demand instrument is payable immediately after it is issued.

GR8 Products, Inc., warrants its goods to be free of defects. Heck issues an instrument to obtain goods from GR8 that prove defective. With respect to payment on the instrument, Heck​

Raul wants to transfer a check to Schmidt. The check is defective if it​

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

A purchaser can become an HDC of an instrument even if it is so incomplete that an element of negotiability is lacking.