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Exam 14: Negotiable Instruments

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Question 31

Multiple Choice

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Barry draws a check payable to "Cash" and presents it to Dollars & Sense store for payment. This instrument is​

A) a bearer instrument.
B) an order instrument.
C) valid but nonnegotiable.
D) void.Fact Pattern 14-2 LNG Corporation and Midstates Utility Company enter a contract for a sale of liquefied natural gas by LNG to Midstates.LNG draws a draft unconditionally ordering Midstates Utility to pay $50,000 to LNG's order in sixty days.Midstates Utility signs and dates the draft.

E) None of the above
F) All of the above

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verified

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Question 32

True/False

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For an instrument to be negotiable, it must be in writing.

A) True
B) False

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Question 33

True/False

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An irregularity on the face of an instrument that calls into question its validity will bar HDC status.

Raul wants to transfer a check to Schmidt. The check is defective if it

Fanny signs a note "payable to the order of Guaranty Bank." Guaranty indorses the note in blank and negotiates it to Haji, who sells it to Iona. Liability that may arise from the transfer of the note from Haji to Iona is

A demand instrument is payable immediately after it is issued and for a reasonable period of time thereafter.

To finance the purchase of a house from Tuna, Uri signs an instrument promising to pay to "Verity Mortgage Service" $160,000 with interest in installments with the final payment due July 10, 2045. To be negotiable, this instrument must include the signature of​

Reliance Collection Agency pays Security Consumer Credit in good faith for a number of unpaid promissory notes. Security warrants that the notes have not been altered. This is​

A person who in good faith acquires a negotiable instrument from a thief cannot become an HDC under any circumstances.

Discharge in bankruptcy is no defense on any instrument regardless of the status of the holder.

An indorser who does not wish to be liable on an instrument can use a qualified indorsement to disclaim this liability.

To be negotiable, an instrument must state with certainty a fixed amount of money.

On the back of an envelope, Phoebe writes, "I promise to pay Quint or bearer $600 on de-mand. [Signed] Phoebe." What type of instrument is this? Is it negotiable? If not, why not?

Brad, the owner of Clear Cut Corporation, signs an instrument that includes the phrase "payment for this note will be made from the proceeds of next year's timber sale." This instrument is

On a sheet of paper, Elle writes, without her signature, "I acknowledge that I owe Frank $600, payable out of the proceeds of the sale of my car, a 1995 Honda Civic, which I promise to advertise 'For Sale' next week. Payment is to be made on or before six months from today." What type of instrument is this? Is it negotiable? If not, why not?

An instrument is dishonored when the party to whom the instrument is presented refuses to pay it.

Bernice signs a promissory note for $1,500 in favor of Community College. The note is undated but specifies that it is "payable one month after date." This note is​

Idina wants to buy a promissory note from Jill. The note is due on April 1. To become an HDC, Idina must buy the note​

Refer to Fact Pattern 14-3. With respect to this instrument, Union Bank is​

GR8 Products, Inc., warrants its goods to be free of defects. Heck issues an instrument to GR8 to obtain goods that prove to be defective. With respect to payment on the instrument, Heck