Question 1

Which of the following will destroy the negotiability of an instrument?

Accepted Answer

A)  Postdating the negotiability of an instrument 
B)  Conditioning payment on the payee's performance 
C)  Using phrases such as "please pay" or "pay to the order of" 
D)  Antedating the negotiability of an instrument 
A)  Postdating the negotiability of an instrument 
B)  Conditioning payment on the payee's performance 
C)  Using phrases such as "please pay" or "pay to the order of" 
D)  Antedating the negotiability of an instrument

Question 2

Negotiability is the same as validity or collectability if the instrument is commercial paper.

Accepted Answer

A) True 
 B)False

Question 3

A note which contains the statement,"I owe you $500":

Accepted Answer

A)  constitutes an order to pay. 
B)  constitutes a promise to pay. 
C)  is not a negotiable instrument. 
D)  does not acknowledge a debt. 
A)  constitutes an order to pay. 
B)  constitutes a promise to pay. 
C)  is not a negotiable instrument. 
D)  does not acknowledge a debt.

Question 4

Which of the following rules of interpretation is applied to resolve conflict or ambiguity in a check?

Accepted Answer

A)  Printed terms prevail over typewritten terms. 
B)  Typewritten terms prevail over handwritten terms. 
C)  Where words and numbers conflict, the words control the numbers. 
D)  Where handwritten terms and printed terms conflict, printed terms prevail over handwritten terms. 
A)  Printed terms prevail over typewritten terms. 
B)  Typewritten terms prevail over handwritten terms. 
C)  Where words and numbers conflict, the words control the numbers. 
D)  Where handwritten terms and printed terms conflict, printed terms prevail over handwritten terms.

Question 5

An instrument states,"Subject to Approval of Title,Pay to the Order of Yvette,$3000." Is the instrument negotiable?

Accepted Answer

No,this instrument is not negotiable.An

Question 6

A "bearer paper" is a check:

Accepted Answer

A)  made payable to the order of cash. 
B)  that can be transferred only by indorsement. 
C)  that can be negotiated only by indorsement. 
D)  that is payable to the order of a specific person. 
A)  made payable to the order of cash. 
B)  that can be transferred only by indorsement. 
C)  that can be negotiated only by indorsement. 
D)  that is payable to the order of a specific person.

Question 7

A _____ is a draft on which the drawer or drawee are the same bank (or branches of the same bank).

Accepted Answer

A)  cashier's check 
B)  teller's check 
C)  promissory note 
D)  certificate of deposit 
A)  cashier's check 
B)  teller's check 
C)  promissory note 
D)  certificate of deposit

Question 8

Tasmia signed a check payable to the order of Shubha.The check contained an obvious variance between the numbers and the written words.The numbers indicated that the bank should pay $13,000 to the order of Shubha,but the written words indicated the bank should pay "the sum of thirteen hundred dollars." Under these circumstances what amount,if any,should the bank pay to the order of Shubha?

Accepted Answer

A)  $1,300 
B)  $13,000 
C)  $6,500 
D)  $650 
A)  $1,300 
B)  $13,000 
C)  $6,500 
D)  $650

Question 9

A draft is a form of commercial paper that involves a promise to pay money.

Accepted Answer

A) True 
 B)False

Question 10

A traveler's check that requires,as a condition to payment,the countersignature of a person whose specimen signature appears on the draft is:

Accepted Answer

A)  negotiable. 
B)  not negotiable. 
C)  negotiable only if it is payable "to cash." 
D)  not negotiable only if it is payable "at sight." 
A)  negotiable. 
B)  not negotiable. 
C)  negotiable only if it is payable "to cash." 
D)  not negotiable only if it is payable "at sight."

Exam 38: Negotiable Instruments

Which of the following will destroy the negotiability of an instrument?

Negotiability is the same as validity or collectability if the instrument is commercial paper.

A note which contains the statement,"I owe you $500":

Which of the following rules of interpretation is applied to resolve conflict or ambiguity in a check?

An instrument states,"Subject to Approval of Title,Pay to the Order of Yvette,$3000." Is the instrument negotiable?

A "bearer paper" is a check:

A _____ is a draft on which the drawer or drawee are the same bank (or branches of the same bank).

A draft is a form of commercial paper that involves a promise to pay money.

A traveler's check that requires,as a condition to payment,the countersignature of a person whose specimen signature appears on the draft is:

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Propertypart Two Contracts

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remediespart Three Sales

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contractspart Four Agency and Employment

The Agency Relationship-Creation, duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws-Part Five Business Organizations

Which Form of Business Organization

Partnerships

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountantspart Six Property

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance-Part Seven Commercial Paper

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers-Part Eight Credit Transactions

Introduction to Security

Security Interests in Personal Property

Bankruptcy-Part Nine Government Regulation

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

Filters