If a negotiable order instrument is transferred to another party without an indorsement, the instrument has been:
A) assigned.
B) negotiated.
C) obtained by fraud, and is therefore invalid.
D) obtained by fraud, but may be ratified.

Question

Quizplus · Accepted Answer

When a negotiable order instrument is transferred to another party without an endorsement, it is considered an assignment. An assignment transfers the rights to the instrument but does not create a negotiable instrument. The new holder of the instrument does not have the same rights and remedies as a holder in due course.

If a Negotiable Order Instrument Is Transferred to Another Party