Which of the following is true when an instrument fails to meet the technical requirements necessary to qualify as a negotiable instrument?
A) The instrument is still enforced as a negotiable instrument if it has been transferred to a holder in due course.
B) The instrument is still enforced as a negotiable instrument if it has been accepted by a bank.
C) The instrument is still enforced as a negotiable instrument if the holder can establish detrimental reliance based on a reasonable belief that the instrument qualified as a negotiable instrument.
D) The instrument is may qualify as an enforceable contract.
E) The instrument is null and void and of no use to the holder.

Question

Quizplus · Accepted Answer

If an instrument fails to qualify as a negotiable instrument, that does not mean it fails to be a perfectly good and enforceable contract. All it means is that the special rules regarding negotiable instruments do not apply.

Which of the Following Is True When an Instrument Fails