Suppose Sharwin purchased $25 000 in candles from Maggie,but expressed to Maggie that he did not have enough cash at the time to pay it all up front.Maggie decides to accept instalment payments from Sharwin at $5 000 each,with a clause stating that defaulted payments give Maggie the immediate right to claim her $25 000 owing plus interest.The negotiable instrument and its respective clause in this situation are

Question

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The negotiable instrument in this case is a promissory note because Sharwin is promising to pay a specific amount to Maggie over a period of time. The respective clause in the promissory note is an acceleration clause, which gives Maggie the right to demand the full amount owing plus interest if Sharwin defaults on any of the instalment payments. Therefore, the best choice is E - a promissory note with an acceleration clause.

Suppose Sharwin Purchased $25 000 in Candles from Maggie,but Expressed