Exam 28: Kinds of Instruments, parties, and Negotiability

Article 3 of the UCC establishes a four year statute of limitations for most actions involving negotiable instruments.

An authorized agent signing an instrument will not be liable on the instrument if the agent discloses on the paper either the identity of the principal or the fact that the agent has signed in a representative capacity.

Negotiability is the characteristic that distinguishes commercial paper and instruments from ordinary contracts.

Instruments are negotiable when they contain the terms required by contract law.

Commercial paper facilitates the transfer of funds and payment.

In a negotiable instrument,the promise or order to pay must be unconditional.

When the drawee of a draft has indicated by writing or record a willingness to pay the amount specified in the draft the drawee is called a(n):

A person who becomes a party to an instrument to add strength to the instrument for the benefit of another party to the instrument is called a:

Article 3 of the UCC establishes a __________-year statute of limitations for most actions involving negotiable instruments.

The signature on an instrument must appear at the lower right-hand corner of the face of the instrument.

If an instrument is negotiable,it is governed by Article 2 of the UCC.

To be negotiable,an instrument must:

George was the maker of a written promissory note that stated that $500 would be paid on the sale of George's automobile.George initialed the note instead of writing his full name.The promissory note stated that it would be payable six months from the date.The promissory note was not dated.You now have come into possession of this note.Is this note negotiable? Discuss the elements of negotiability and whether each one has been met.

Which of the following terms would make an instrument nonnegotiable?

The signature requirement,as an element of negotiability,can be met by:

An instrument is order paper if:

An instrument is order paper when by its terms it is payable to the order of any person described in it,or to a person or order.

An instrument is payable on demand if it is payable:

Conville signed a note as an officer of the Hughesville Manufacturing Corporation,but she did not name the corporation in the note or indicate that she was acting as an officer for it.Later,she was sued by the Grange National Bank,the holder of the note.She raised the defense that the corporation was liable on the note.Who was liable?

A payee is not liable on an instrument until the payee transfers the instrument to someone else.