A traveler's check that requires, as a condition to payment, the countersignature of a person whose specimen signature appears on the draft is:
A) negotiable.
B) not negotiable.
C) negotiable only if it is payable "to cash."
D) not negotiable only if it is payable "at sight."

Question

Quizplus · Accepted Answer

Revised Article 3 of the Uniform Commercial Code addresses the negotiability of traveler's checks that commonly require, as a condition to payment, a countersignature of a person whose specimen signature appears on the draft. Under the revision, the condition does not prevent the instrument from meeting the "unconditional promise or order" requirement. However, if the person whose specimen signature appears on the instrument fails to countersign it, the failure to sign becomes a defense to the obligation of the issuer to pay.

A Traveler's Check That Requires, as a Condition to Payment