Mortimer negotiates an instrument to Nelson. 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

Quizplus · Accepted Answer

Negotiation is the process by which an instrument, such as a check or promissory note, is transferred from one person to another in a way that the transferee becomes the holder of the instrument. The transfer must be made for valuable consideration, such as money or the satisfaction of a debt, and must conform to the requirements of the instrument itself and applicable law. Choice A also includes the requirement for consideration, but it is not necessary to mention the contract itself as a requirement for negotiation. Choices C and D are incorrect because they are not essential elements of negotiation.

Mortimer Negotiates an Instrument to Nelson