Mort negotiates an instrument to Nadia. Negotiation is the transfer of an instrument
A) for valuable consideration under a contract.
B) in such form that the transferee becomes a holder.
C) pursuant to preliminary contract discussions.
D) without the payment of a recognized medium of exchange.

Question

Mort negotiates an instrument to Nadia. Negotiation is the transfer of an instrument​
A) for valuable consideration under a contract.​
B) ​in such form that the transferee becomes a holder.
C) ​pursuant to preliminary contract discussions.
D) ​without the payment of a recognized medium of exchange.

Quizplus · Accepted Answer

Negotiation involves the transfer of an instrument in such a form that the transferee becomes a holder of the instrument. This means that the transferee obtains the rights and privileges of a holder, including the right to enforce the instrument. The transfer must also be made for valuable consideration under a contract, which means that there must be a legal agreement between the transferor and the transferee that specifies the terms of the transfer. Thus, option B is the best choice.

Mort Negotiates an Instrument to Nadia