Yves negotiates an instrument to Zachary.Negotiation is the transfer of an instrument
A)for valuable consideration under a contract.
B)in a form and by a means that makes the transferee a holder.
C)pursuant to preliminary contract discussions.
D)without the payment of a recognized medium of exchange.

Question

Quizplus · Accepted Answer

Negotiation is the process of transferring an instrument in a form and by a means that makes the transferee a holder. This means that the transferee is now in possession of the instrument and has the right to enforce it. In order for negotiation to take place, consideration (something of value) must be given and there must be a contract between the parties. The option of choice A is also partially correct, as consideration must be given for negotiation to take place, but it does not fully explain the process of negotiation. Choices C and D are incorrect, as negotiation does not necessarily involve preliminary contract discussions and does require the transfer of valuable consideration.

Yves Negotiates an Instrument to Zachary