Alvin signs a promissory note payable to the order of Borrow & Spend Loan Company. The note states that it is payable "with interest at the legal rate." This note is
A) negotiable.
B) not negotiable, because it does not specify a rate of interest.
C) not negotiable, because it is a promissory note.
D) not negotiable, because it is payable only with interest.

Question

Alvin signs a promissory note payable to the order of Borrow & Spend Loan Company. The note states that it is payable "with interest at the legal rate." This note is
A) ​negotiable.
B) ​not negotiable, because it does not specify a rate of interest.
C) ​not negotiable, because it is a promissory note.
D) ​not negotiable, because it is payable only with interest.

Quizplus · Accepted Answer

The promissory note is negotiable because it meets the requirements of negotiability, including being in writing, signed by the maker, containing a promise to pay a sum certain, and payable on demand or at a definite time. The fact that it specifies the interest rate as "the legal rate" is sufficient to indicate the terms of payment and does not invalidate its negotiability.

Alvin Signs a Promissory Note Payable to the Order of Borrow