Deck 21: Essentials of Negotiability

Question 1

Which of the following is an unconditional promise to pay? I will pay you    :

A)When I sell my car.
B)In two weeks if the goods are not defective.
C)W henever I have sufficient funds in my account.
D)On Tuesday.

Answer 1

D

Question 2

Who can enforce a negotiable instrument which was only partially filled in and signed before delivery?

A)An original payee may enforce the paper regardless of what is filled in the blanks.
B)A transferee may enforce the paper according to the filled-in terms.
C)An assignee may enforce the paper according to the filled-in terms.
D)A holder in due course may enforce the paper according to the filled-in terms

Answer 2

D

Question 3

A negotiable instrument must be in writing and signed by the party executing it. ​

Answer 3

True

Question 4

If the choice of whether an instrument is payable in either cash or goods is left up to the holder, the instrument is not negotiable.

Question 5

An order or promise in a negotiable instrument must be conditional.

Question 6

Which of the following is true of a check made out to the order of a person?

A)The drawee can deposit the check after its validity expires.
B)The drawee can only deposit the check into his own account.
C)The drawee cannot indorse the check to anyone else.
D)The drawee can encash the check at the appropriate bank.

Question 7

A holder in due course can enforce paper according to filled-in terms even when the terms were not authorized.

Question 8

When a negotiable instrument is payable to order, the payee need not be named.

Question 9

Explain the requirements of negotiability. ​

Question 10

Which of the following describes paper payable to order?

A)pay to the order of Hill
B)pay to the order of cash
C)pay to the order of bearer
D)pay to Jalen or bearer

Question 11

Which of the following is a requirement of negotiability? ​

A)The payee and the drawee need not be designated.
B)The instrument must be in writing and signed by the party executing it.
C)The instrument must provide for the payment of a flexible amount of money.
D)The order or the promise in the instrument must be conditional.

Question 12

The sum payable in a negotiable instrument cannot be dependent on future profits.

Question 13

If the choice of whether an instrument is payable in either cash or goods is left up to the holder, the instrument is not negotiable.

Question 14

The UCC defines as "the first delivery of an instrument by the maker or drawer for the purpose of giving rights on the instrument to any person."

A)possession
B)negotiation
C)issue
D)transfer

Question 15

The name of the place where an instrument was drawn need not be specified.

Question 16

Jim agreed to pay Jose $1,000 by check, provided he is able to sell his farm. However, he did not mention the number of days it would take for him to sell the farm nor did he provide a contingency date. Which of the following is legally permissible in this scenario?

A)Jose can take possession of Jim's farm as repayment.
B)Jim's promise to pay is valid as he has offered Jose the money.
C)Jim can write and deliver a check to Jose for $1,000 but he cannot cash the check until Jim sells the farm.
D)Jim's promise to pay is conditional and therefore Jose should obtain a negotiable instrument.

Question 17

In order to be negotiable, an instrument must comply with the standard legal forms.

Question 18

The language used in a promissory note must show that a promise is intended.

Question 19

Whenever delivery is made in connection with the original issue, it must be unconditional.

Question 20

An instrument executed with a lead pencil does not meet the legal requirements of negotiability.