Lucas signs an instrument payable to the order of MoneyNow, Inc., that allows a holder to demand payment of the entire amount due, with interest, if Lucas fails to make a payment. This instrument is
A) negotiable.
B) nonnegotiable, because a holder can move up the payment date.
C) nonnegotiable, because moving up the payment date is conditional.
D) nonnegotiable, because the exact payment date cannot be determined from the face of the instrument.

Question

Lucas signs an instrument payable to the order of MoneyNow, Inc., that allows a holder to demand payment of the entire amount due, with interest, if Lucas fails to make a payment. This instrument is
A) ​negotiable.
B) ​nonnegotiable, because a holder can move up the payment date.
C) ​nonnegotiable, because moving up the payment date is conditional.
D) ​nonnegotiable, because the exact payment date cannot be determined from the face of the instrument.

Quizplus · Accepted Answer

The instrument described in the scenario meets the requirements of negotiability because it is payable to the order of a specific payee (MoneyNow, Inc.), it contains an unconditional promise of payment, it is payable in a sum certain, and it does not contain any unauthorized undertakings or instructions. The provision allowing a holder to demand payment in the event of nonpayment does not affect the negotiability of the instrument.

Lucas Signs an Instrument Payable to the Order of MoneyNow