Jacob signs a promissory note payable to Kent "with interest" on which he conspicuously notes that it is "nonnegotiable." This instrument is
A) negotiable.
B) nonnegotiable, because it includes the notation "nonnegotiable."
C) nonnegotiable, because it does not specify a rate of interest.
D) nonnegotiable, because the exact amount payable cannot be determined from the face of the instrument.

Question

​Jacob signs a promissory note payable to Kent "with interest" on which he conspicuously notes that it is "nonnegotiable." This instrument is
A) ​negotiable.
B) ​nonnegotiable, because it includes the notation "nonnegotiable."
C) ​nonnegotiable, because it does not specify a rate of interest.
D) ​nonnegotiable, because the exact amount payable cannot be determined from the face of the instrument.

Quizplus · Accepted Answer

By including the notation "nonnegotiable" on the promissory note, Jacob has made it clear that he does not want the document to be negotiated (transferred) to a third party for payment. Even though it includes the term "with interest," the nonnegotiable notation supersedes any negotiability that would otherwise be inferred from the inclusion of interest.

​Jacob Signs a Promissory Note Payable to Kent "With Interest

Jacob Signs a Promissory Note Payable to Kent "With Interest