Yves negotiates an instrument to Zack. Negotiation is the transfer of an instrument
A) for valuable consideration under a contract.
B) in a form and by a means that makes the transferee a holder.
C) pursuant to preliminary contract discussions.
D) without the payment of a recognized medium of exchange.

Question

Quizplus · Accepted Answer

Negotiation is the act of transferring the ownership of the instrument from one person to another in a form and by means that makes the transferee a holder of the instrument. This transfer is made for valuable consideration under a contract, which is not necessarily limited to payment with recognized medium of exchange. However, negotiation does require a valid contract and transfer of ownership in a form and by means recognized by the law. Therefore, option B is the best choice. Option A is partially correct but does not cover the requirements of the means and form of transfer. Option C is incorrect as it refers to the preliminary contract discussions rather than the actual transfer of the instrument. Option D is incorrect as it is not necessary for the payment to be made in a recognized medium of exchange for the transfer of ownership to occur.

Yves Negotiates an Instrument to Zack