Exam 17: Negotiability, transferability, and Liability

When an instrument is dishonored,only written notice is sufficient to hold secondary parties liable.

Dewey is the payee for a check written by Fred.Cash Credit Corporation (CCC) accepts the check from Dewey as part of a payment.CCC cannot become a HDC if

A time draft is payable on sight.

A check is not negotiable if it is payable on demand.

To be negotiable,an instrument must be payable in afixed amount.

To obtain office supplies for All-Care Medical Clinic,Britney executes a draft in favor of Chris.A draft is

InterComp normally sells $50,000 worth of software to Power Source,a retail elec-tronics store,each summer on terms requiring payment in sixty days. One year,InterComp wants cash,but Power Source wants the usual sixty days. To meet both needs,the parties can arrange

Sarah has a checking account at Secure Bank.Sarah buys her roommate Sophie's two tickets to a Broadway musical for $200.Sarah writes Sophie a check for the tickets.In this situation,Secure Bank is the

To obtain a business license,Bess writes a check to a certain state agency.Bess is

Wilson buys a promissory note from Oli.The note is due on December 5.December 5 is a Sunday.The note is

Personal defenses are used to avoid payment to an ordinary holder of a negotiable instrument,but not to an HDC or a holder through an HDC.

A bearer instrument is an instrument that does not designate a specific payee.

Ralph signs an instrument promising to pay a total of $10,000 to Martha in $1,000 monthly installments with the final payment being made on August 1.Ralph unexpectedly inherits $10,000 from his aunt on May 15.Ralph may

To buy a stuffed cow,Ken executes a check "pay to Laura or bearer" and gives it to Laura,who does not own a stuffed cow. This check is

Stature Loan Company has notice that a promissory note is overdue if the note is a demand instrument and Stature takes it

If a bank is both the drawer and the drawee with regard to a draft,then the draft is a

Jill,in good faith and for value,gets from Kiley a negotiable bearer in-stru-ment.Jill does not know that Kiley stole the instrument.Jill is

Kris wants one of Jasmine's purebred Persian kittens.Kris signs an instrument in which she promises to pay Jasmine for a kitten.The instrument will be negotiable if it is payable in

To borrow money to finance the start-up of his business,Bob executes an instrument in favor of City Bank.For the instru-ment to be negotiable,the signature must be

On a trade acceptance,the drawer is also the payee.