Veggie Bowl Café signs an instrument in favor of Whole Wheat Company that states it is "subject to a certain agreement between buyer and seller." This instrument is
A)negotiable.
B)nonnegotiable, because it is made subject to a separate agreement.
C)nonnegotiable, because it refers to a separate agreement.
D)nonnegotiable, because the buyer and seller are not the same parties.

Question

Quizplus · Accepted Answer

An instrument that states it is "subject to a certain agreement between buyer and seller" is nonnegotiable because its terms are not fully stated within the instrument itself and depend on an external agreement. This makes the instrument's terms uncertain without reference to the separate agreement, thus failing the requirement for negotiability that terms must be complete and certain within the instrument itself.

Veggie Bowl Café Signs an Instrument in Favor of Whole