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Exam 17: Negotiable Instruments: Negotiability and Transferability

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Question 21

Multiple Choice

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Which of the following is the payee's or last endorsee's signature and nothing else?

A) A special endorsement
B) An allonge
C) A blank endorsement
D) A qualified endorsement
E) A restricted endorsement

F) All of the above
G) A) and D)

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verified

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Question 22

True/False

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If an instrument is silent as to the time of payment,the Uniform Commercial Code presumes that it is a demand instrument.

A) True
B) False

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Question 23

Multiple Choice

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The first ________ of any amount deposited in a bank must be available to the depositor on the business day following the day of deposit.

The party ordered to pay on a draft is the ________.

Which of the following was the result on appeal in The Twin City Bank v.Kenneth Isaacs,the case in the textbook in which the bank appealed a judgment against it for significant damages after the bank wrongfully held funds of depositors who had been the victim of check forgery?

A party who possesses a negotiable instrument payable to that party or to the bearer of the instrument is a ________ of the instrument.

Yard Mowing.Paula agreed to mow John's yard once a week for $50 per week throughout the summer.Paula,however,was having trouble getting her money from John.On one occasion,he gave her a handwritten IOU stating "I,John Jones,owe Paula Smith $50" which he signed at the end.A couple of weeks later,John did not have the money with which to pay Paula for additional mowing,and he handwrote the following on a piece of paper and gave it to her: "I,John Jones,promise to pay Paula Smith or to bearer,the sum of $100 on Monday,July 22,2017." Paula quit mowing John's yard,and disgusted with John,Paula assigned both documents to Vince.When Vince presented the documents to John,John refused to pay on the basis that after inspecting the yard,he decided that Paula was doing a poor job.Vince told him the documents constituted negotiable instruments,but John disagreed.What is the effect of the instruments being written by hand?

A bank may determine that ________ or later is the cutoff hour for handling checks.

Which of the following is a substitute for cash?

Used Car Commission.William promised to sell Helen's car for her,but he wanted a commission of 10%.Helen signed an instrument promising to pay William a 10% commission if he sold her car.William assigned the agreement to Phil.Helen's car was sold and the buyer paid Helen.A dispute ensued between Helen and William regarding whether William found the buyer or the buyer found Helen.When Phil asked Helen for payment on the instrument,Helen refused.William,Helen,and Phil settled their dispute without going to court,and Helen wrote Phil a check for $3,000.Phil endorsed the check on the back,planning to take it to the bank the next day.Unfortunately,Phil lost the check and it was found by Barry,who cashed it at the local bank.Barry then left town.Which of the following is true regarding the instrument signed by Helen promising to pay William a 10% commission if he sold her car?

Which of the following types of commercial paper requires only a delivery of the instrument to the holder by the payee?

An instrument that reads "Pay to the order of Jones or Green" is payable to ________ payees.

A(n) ________ bank is a bank other than the first bank and the last bank in the check collection process that receives a transferred check.

Book Payment.Molly and Pat signed a contract providing that "Pat will furnish the correct used business law book for use in Molly's business law class; and in return,on August 15,2017,Molly promises to pay Pat $50 for the book." Molly took the book and planned to pay Pat.Meanwhile,Pat properly assigned the contract Molly had signed to Jack.When Molly went to class,however,she discovered that the book was the incorrect book.When Jack asked Molly for payment,Molly refused.Molly told Jack that the book was useless to her and that she was not paying either him or Pat anything for it.Jack told Molly that he had an enforceable assignment in the form of a negotiable instrument and that he could collect regardless of whether the book was useless.Molly did not believe him.Continuing with her attempt to save money on books,Molly agreed to buy Tim's United States history book for $40.She had an oral agreement with Tim that he would give her the book and that she would pay him in three days.This time Molly got the right book.Tim,in writing,properly assigned the right to the $40 payment to Richard.Richard asked Molly for the money.Molly admitted her agreement with Tim but told Richard that she was not going to pay him because he did not have a negotiable instrument.Molly also purchased a communications book from Sam promising in writing to give him in return the next day,to his order,a used DVD player she owned.What is the effect of Molly agreeing to give Sam a DVD in return for the book?

What is the difference between a demand negotiable instrument and a time negotiable instrument?

For an instrument to be negotiable,the instrument must indicate that it was created for the purpose of being ________.

A person who creates an endorsement is called a(n) ________.

A(n) ________ check is a check that is accepted at the bank at which it is drawn.

A negotiable instrument is not a substitute for cash.

Which of the following are types of unqualified endorsements?