Fact Pattern 22-2 LNG Corporation and Midstates Utility Company enter a contract for a sale of liquefied natural gas by LNG to Midstates. LNG draws a draft unconditionally ordering Midstates Utility to pay $50,000 to LNG's order in sixty days. Midstates Utility signs and dates the draft.
Refer to Fact Pattern 22-2. This instrument is
A) a cashier's check.
B) a nonnegotiable instrument.
C) a promissory note.
D) a trade acceptance.

Question

Quizplus · Accepted Answer

A trade acceptance is a draft or bill of exchange drawn by the seller (LNG) on the buyer (Midstates Utility) for the buyer to pay a specified amount at a future date, which is the case here.

Fact Pattern 22-2 LNG Corporation and Midstates Utility Company Enter