A draft is payable "to the order of Joe Jones or to bearer." Sally finds it and demands payment.Should the drawer pay Sally?
A)No, unless Joe Jones's name is crossed off.
B)No, unless "bearer" is handwritten.
C)Yes, since the word "or" is contained in the instrument, either will do.
D)No, the terminology is ambiguous and therefore must be paid only to the order of Joe Jones.

Question

Quizplus · Accepted Answer

The draft is payable either to the order of Joe Jones or to bearer, meaning that anyone who comes into possession of the draft can demand payment. The inclusion of the word "or" indicates that either option is acceptable, so the drawer should pay Sally.

A Draft Is Payable "To the Order of Joe Jones