Exam 22: Creation of Negotiable Instruments

________ are special forms of contracts that satisfy the requirements established by Article 3 of the Uniform Commercial Code (UCC).

Explain the requirement for a fixed amount in negotiable instruments?

________ of the Uniform Commercial Code (UCC) is a model code that establishes rules for the creation of, transfer of, enforcement of, and liability on negotiable instruments.

If the payee of the instrument is not mentioned on the face of the instrument, it is not a negotiable instrument.

A promise or order is only considered negotiable if ________.

What are nonnegotiable contracts?

Negotiable instruments help in creating a credit economy.

A negotiable instrument must be in writing in order to be considered valid.

A ________ is a type of draft that is always paid at a future date.

An acknowledgement of debt is sufficient to consider a promissory note as a negotiable instrument.

Instruments that are payable on demand are called order instruments.

Trade names or assumed names cannot be used for signing negotiable instruments.

Security posted by a promissory note maker to the lender for repayment of money is known as collateral.

A certificate of deposit is an order to pay.

Instruments that are payable upon an uncertain act or event are not negotiable.

A sight draft that arises when a seller extends credit to a buyer with the sale of goods is known as a ________.

An acceleration clause permits the maker to pay the amount due prior to the due date of an instrument.

Which of the following is true of a certificate of deposit?

In order to be considered valid, a negotiable instrument need not state a fixed amount of money.

Acceptance of drafts can be done orally.