Joseph obtains a draft that states as follows: "pay to the order of Joseph Daniels the sum of $1000." Joseph wants to negotiate this instrument to Jack Spratt to pay a debt owing to Jack.To negotiate this instrument,Joseph must
A)indicate accepted on the draft and then deliver it to Jack.
B)endorse and deliver the instrument to Jack.
C)present the instrument to Jack's bank and have it accepted and then transfer it to Jack.
D)endorse and present the instrument to Jack's bank.
E)hand over the draft to Jack and get a receipt.

Question

Quizplus · Accepted Answer

To negotiate the instrument, Joseph must endorse (sign) it on the back and then deliver it to Jack. By endorsing it, Joseph is transferring the ownership rights of the instrument to Jack, who can then present it for payment or negotiate it further. Option A is incorrect as "accepted" is not a proper endorsement. Option C is incorrect as there is no need for the instrument to be accepted by Jack's bank. Option D is also incorrect as presenting it to Jack's bank is not necessary. Option E is incorrect as simply handing over the draft without endorsement does not transfer ownership rights.

Joseph Obtains a Draft That States as Follows: "Pay to the Order