Fact Pattern 19-2
LNG Corporation and Midstates Utility Company enter a contract for a sale of liquefied natural gas. LNG draws a draft unconditionally ordering Midstates Utility to pay $50,000 to LNG's order in sixty days. Midstates Utility signs and dates the draft.
-Refer to Fact Pattern 19-2. This instrument is
A)a banker’s acceptance.
B)a nonnegotiable instrument.
C)a promissory note.
D)a trade acceptance.

Question

Fact Pattern 19-2
​LNG Corporation and Midstates Utility Company enter a contract for a sale of liquefied natural gas. LNG draws a draft unconditionally ordering Midstates Utility to pay $50,000 to LNG's order in sixty days. Midstates Utility signs and dates the draft.
-Refer to Fact Pattern 19-2. This instrument is
A)a banker’s acceptance.
B)a nonnegotiable instrument.
C)a promissory note.
D)a trade acceptance.

Quizplus · Accepted Answer

The instrument described in the fact pattern is a trade acceptance because it is an unconditional order for Midstates Utility to pay $50,000 to LNG's order in sixty days, and it was signed and dated by the buyer.

Fact Pattern 19-2 ​LNG Corporation and Midstates Utility Company Enter a Contract for a Contract

Fact Pattern 19-2 LNG Corporation and Midstates Utility Company Enter a Contract for a Contract