Brendan signs a check "pay to the order of City College Bookstore" drawn on his account in Delta Bank to pay for his current semester's textbooks. The bookstore deposits the check in its account in Eagle Bank. Like most checks, this check is
A) a one-party instrument.
B) a nonnegotiable instrument.
C) a special type of draft.
D) not a substitute for cash.

Question

Quizplus · Accepted Answer

The check is a special type of draft because it orders Delta Bank to pay money to City College Bookstore, which is then deposited in Eagle Bank. It is not a one-party instrument because it involves two parties (Brendan and City College Bookstore) and it is not non-negotiable because the bookstore can negotiate the check to Eagle Bank. Finally, although it is a substitute for cash, this is not an attribute that distinguishes it from other types of negotiable instruments.

Brendan Signs a Check "Pay to the Order of City