Question 1

An indorsement "for deposit" is a collection indorsement.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following is not an effective restrictive indorsement?

Accepted Answer

A) "Pay only Jane Doe." 
B) "For deposit." 
C) "Pay any bank." 
D) "For collection." 
A) "Pay only Jane Doe." 
B) "For deposit." 
C) "Pay any bank." 
D) "For collection." A

Question 3

Which of the following would be an indorsement in trust?

Accepted Answer

A) Pay Donna for Alice. 
B) Pay Donna for account of Alice. 
C) Pay Donna as agent of Alice. 
D) All of the above are indorsements in trust. 
A) Pay Donna for Alice. 
B) Pay Donna for account of Alice. 
C) Pay Donna as agent of Alice. 
D) All of the above are indorsements in trust. D

Question 4

If the issuer and the person paying an instrument subject to the impostor rule are both negligent, comparative negligence would apply.

Accepted Answer

A) True 
 B)False

Question 5

Ricardo is the holder of a check that contains the indorsement "Without Recourse, (signed) Mary Roberts." This indorsement:

Accepted Answer

A) makes further indorsement impossible. 
B) requires a special indorsement by the transferee. 
C) limits the liability of Mary Roberts. 
D) limits the liability of all subsequent holders, including Ricardo. 
A) makes further indorsement impossible. 
B) requires a special indorsement by the transferee. 
C) limits the liability of Mary Roberts. 
D) limits the liability of all subsequent holders, including Ricardo.

Question 6

Whether a transfer is by assignment or by negotiation, the transferee acquires the rights the transferor had.

Accepted Answer

A) True 
 B)False

Question 7

An allonge is a piece of paper affixed to the instrument.

Accepted Answer

A) True 
 B)False

Question 8

Indorsements with ineffective restrictions include which of the following?

Accepted Answer

A) The indorser makes the rights of the indorsee subject to the happening or non-happening of a specified event. 
B) An indorsement "For Collection." 
C) An indorsement stating "Pay to Melanie for Sharon." 
D) All of the above. 
A) The indorser makes the rights of the indorsee subject to the happening or non-happening of a specified event. 
B) An indorsement "For Collection." 
C) An indorsement stating "Pay to Melanie for Sharon." 
D) All of the above.

Question 9

"Order paper" is negotiated by delivery only.

Accepted Answer

A) True 
 B)False

Question 10

Clara, a customer of Community Bank, deposits in Community Bank a check for collection without properly indorsing it.Community Bank becomes a holder when it accepts the check for deposit if Clara is a holder.

Accepted Answer

A) True 
 B)False

Question 11

An indorsement in trust creates a trust for the benefit of himself or others.

Accepted Answer

A) True 
 B)False

Question 12

"Pay to the order of Jose Dejesus" is a special indorsement.

Accepted Answer

A) True 
 B)False

Question 13

Laura is in possession of a check which contains the following indorsement, "Sam Smith, without recourse, for collection only." The indorsement would be classified as:

Accepted Answer

A) blank, qualified, and restrictive. 
B) blank, unqualified, and nonrestrictive. 
C) special, unqualified, and restrictive. 
D) special, qualified, and nonrestrictive. 
A) blank, qualified, and restrictive. 
B) blank, unqualified, and nonrestrictive. 
C) special, unqualified, and restrictive. 
D) special, qualified, and nonrestrictive.

Question 14

An indorsement which prohibits further transfer is a(n):

Accepted Answer

A) qualified indorsement. 
B) special indorsement. 
C) indorsement for collection. 
D) allonge. 
A) qualified indorsement. 
B) special indorsement. 
C) indorsement for collection. 
D) allonge.

Question 15

The requirements for negotiation are the same for both order paper and bearer paper.

Accepted Answer

A) True 
 B)False

Question 16

An indorsement may be simple or complex.

Accepted Answer

A) True 
 B)False

Question 17

A conditional indorsement is one by which the indorser makes the rights of the indorsee subject to the happening or nonhappening of a specified event, but such an indorsement is ineffective under Revised Article 3.

Accepted Answer

A) True 
 B)False

Question 18

Maxine indorsed her paycheck by signing her name on the back, but she lost it on the way to the bank.The check is now comparable to cash because it is a bearer instrument.

Accepted Answer

A) True 
 B)False

Question 19

An indorsement must be written on the instrument itself.

Accepted Answer

A) True 
 B)False

Question 20

The shelter rule did not exist at common law.

Accepted Answer

A) True 
 B)False

Exam 25: Transfer

An indorsement "for deposit" is a collection indorsement.

Which of the following is not an effective restrictive indorsement?

Which of the following would be an indorsement in trust?

If the issuer and the person paying an instrument subject to the impostor rule are both negligent, comparative negligence would apply.

Ricardo is the holder of a check that contains the indorsement "Without Recourse, (signed) Mary Roberts." This indorsement:

Whether a transfer is by assignment or by negotiation, the transferee acquires the rights the transferor had.

An allonge is a piece of paper affixed to the instrument.

Indorsements with ineffective restrictions include which of the following?

"Order paper" is negotiated by delivery only.

Clara, a customer of Community Bank, deposits in Community Bank a check for collection without properly indorsing it.Community Bank becomes a holder when it accepts the check for deposit if Clara is a holder.

An indorsement in trust creates a trust for the benefit of himself or others.

"Pay to the order of Jose Dejesus" is a special indorsement.

Laura is in possession of a check which contains the following indorsement, "Sam Smith, without recourse, for collection only." The indorsement would be classified as:

An indorsement which prohibits further transfer is a(n):

The requirements for negotiation are the same for both order paper and bearer paper.

An indorsement may be simple or complex.

A conditional indorsement is one by which the indorser makes the rights of the indorsee subject to the happening or nonhappening of a specified event, but such an indorsement is ineffective under Revised Article 3.

Maxine indorsed her paycheck by signing her name on the back, but she lost it on the way to the bank.The check is now comparable to cash because it is a bearer instrument.

An indorsement must be written on the instrument itself.

The shelter rule did not exist at common law.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

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Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

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Form and Content

Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

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Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

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Introduction to Property, Property Insurance, Bailments, and Documents of Title

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Transfer and Control of Real Property

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