Question 1

A negotiation may be valid to transfer the instrument even under which of the following condition(s)?

Accepted Answer

A) The negotiation is made by an infant. 
B) The negotiation is made by a person without capacity. 
C) The negotiation is part of an illegal transaction. 
D) All of the above. 
E) None of the above. 
A) The negotiation is made by an infant. 
B) The negotiation is made by a person without capacity. 
C) The negotiation is part of an illegal transaction. 
D) All of the above. 
E) None of the above.

Question 2

An anomalous indorsement is:

Accepted Answer

A) one that specifically identifies the person to whose order the instrument is payable. 
B) an indorsement made by a person that is not the holder of the instrument. 
C) one that makes the signer liable on the instrument as an indorser. 
D) Both (a) and (b). 
E) Both (b) and (c). 
A) one that specifically identifies the person to whose order the instrument is payable. 
B) an indorsement made by a person that is not the holder of the instrument. 
C) one that makes the signer liable on the instrument as an indorser. 
D) Both (a) and (b). 
E) Both (b) and (c).

Question 3

The FTC upholds the preferential position enjoyed by a holder in due course of instruments concerning debts arising out of consumer credit contracts.

Accepted Answer

A) True 
 B)False

Question 4

Jerry takes a $400 check to Primary Bank,where he asks for $75 in cash and he deposits the remaining balance.Primary Bank has "given value" as far as the requirements of holder in due course status to the extent of $75.

Accepted Answer

A) True 
 B)False

Question 5

A holder must actually have the instrument in his possession.

Accepted Answer

A) True 
 B)False

Question 6

Identify the defenses that can be used against a holder in due course and those defenses that cannot be used against a holder in due course.

Accepted Answer

Real defenses are those that can be used

Question 7

An indorsement may be simple or complex.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The Code provides an exception to the executory promise rule in:

Accepted Answer

A) the giving of a negotiable instrument. 
B) the making of an irrevocable obligation to a third party. 
C) the lack of notice. 
D) Both (a) and (b) are correct. 
A) the giving of a negotiable instrument. 
B) the making of an irrevocable obligation to a third party. 
C) the lack of notice. 
D) Both (a) and (b) are correct.

Question 10

Ella induces Tammy,by fraud in the inducement,to make an instrument payable to the order of Ella.She subsequently negotiates the instrument to Adam,a holder in due course.If Ella later reacquires the instrument from Adam,Ella will succeed to Adam's rights as a holder in due course under the shelter rule.

Accepted Answer

A) True 
 B)False

Question 11

The impostor rule is an exception to the general rule that negotiation of any order instrument requires a valid indorsement by the person to whose order the instrument is payable.

Accepted Answer

A) True 
 B)False

Exam 25: Transfer and Holder in Due Course

A negotiation may be valid to transfer the instrument even under which of the following condition(s)?

An anomalous indorsement is:

The FTC upholds the preferential position enjoyed by a holder in due course of instruments concerning debts arising out of consumer credit contracts.

Jerry takes a $400 check to Primary Bank,where he asks for $75 in cash and he deposits the remaining balance.Primary Bank has "given value" as far as the requirements of holder in due course status to the extent of $75.

A holder must actually have the instrument in his possession.

Identify the defenses that can be used against a holder in due course and those defenses that cannot be used against a holder in due course.

An indorsement may be simple or complex.

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

The Code provides an exception to the executory promise rule in:

The impostor rule is an exception to the general rule that negotiation of any order instrument requires a valid indorsement by the person to whose order the instrument is payable.

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

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Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

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Relationship of Principal and Agent

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Formation and Internal Relations of General Partnerships

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

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