Deck 23: Negotiation and Discharge

Question 1

A special endorsement is one having no words other than the name of the indorser.

Answer 1

False

Question 2

James wants to indorse a check to Janice, but wishes to rid himself from all further liabilities. Which of the following types of indorsements is James likely to use in this case?

A)Special indorsement
B)Blank indorsement
C)Restrictive indorsement
D)Qualified indorsement

Answer 2

D

Question 3

A qualified indorsermakes no warranties regarding the instrument.

Answer 3

False

Question 4

The trailing edge is the right side of a check when looking at it from the front.

Question 5

For what does an indorser of a negotiable instrument become liable?

A)payment of the face amount and certain warranties
B)stated interest payable from the date of the indorsement
C)nothing; only the maker of an instrument is liable
D)any amounts not paid by the indorser's own bank

Question 6

Which of the following best describes a restrictive indorsement?

A)It is an indorsement that has the effect of qualifying, thus limiting, the liability of the indorser.
B)It is an indorsement that attempts to prevent the use of the instrument for anything except the stated use.
C)It is an indorsement that designates the particular person to whom payment should be made.
D)It is an indorsement having no words other than the name of the indorser.

Question 7

An instrument made payable to more than one person is not negotiable.

Question 8

The Uniform Commercial Code does not require an allonge to be attached to an instrument.

Question 9

Delivery of a bearer instrument is sufficient to pass title.

Question 10

Where should a check be indorsed?

A)on the back along the trailing edge
B)underneath the drawer's signature
C)anywhere there is room on the instrument
D)on a paper attached to the instrument

Question 11

Parties can be discharged from an obligation by a discharge of their debts in bankruptcy.

Question 12

The warranty liability of a qualified indorser is the same as that of an unqualified indorser.

Question 13

A depository bank receiving a check with a restrictive indorsement, such as "for deposit " must always honor the restriction.

Question 14

A(n)is a signature on the back of an instrument along with any directions or limitations regarding use of or liability for the instrument. ​

A)authorization
B)renunciation
C)indorsement
D)endorsement

Question 15

is a unilateral act of a holder of an instrument, usually without consideration, whereby the holder gives up rights on the instrument.

A)Refutation
B)Cancellation
C)Repudiation
D)Renunciation

Question 16

Which of the following is true regarding the negotiator of bearer paper?

A)The negotiator is not liable to the immediate transferee as a warrantor of the genuineness of the instrument.
B)One who negotiates a bearer instrument by delivery alone does not guarantee payment.
C)The negotiator must indorse a bearer paper when he negotiates it.
D)The mere delivery by the negotiator of a bearer paper does not change title.

Question 17

When a negotiable instrument is lost, this automatically discharges the obligation of the holder.

Question 18

A indorsement designates the particular person to whom payment should be made.

A)depository
B)blank
C)special
D)restrictive

Question 19

Explain liabilities for payment of instrument

Question 20

A cancellation made by mistake is not effective.