Question 1

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

Accepted Answer

A)  Cashier's check
B)  Certified check
C)  Traveler's check
D)  Approved draft
E)  Check certificateF) C) and E)
G) A) and B)

Question 2

Which of the following is not a bearer instrument?

Accepted Answer

A)  An instrument payable to "X."
B)  An instrument payable to "bearer."
C)  An instrument payable to "cash."
D)  An instrument payable to "the order of John Doe."
E)  An instrument payable to no one.F) C) and D)
G) B) and D)

Question 3

Under the UCC,what role does Auto Repair hold?

Accepted Answer

A)  Payee
B)  Payor
C)  Owner
D)  Drawer
E)  DraweeF) A) and E)
G) All of the above

Question 4

List the seven requirements for an instrument to be negotiable.

Accepted Answer

The seven requiremen...

Question 5

Which is the correct term for a promise made by a bank to pay a payee a certain amount of money at a future time?

Accepted Answer

A)  A certificate of deposit
B)  A check
C)  A novation
D)  A note
E)  A draftF) A) and E)
G) A) and D)

Question 6

[Defaulted Loan] Bruce wanted to open his own restaurant,The Burger Bar,and called his friend Janet for a loan.Janet orally agreed to loan Bruce $200,000.The agreement was not put into writing.Two years later,the loan was never repaid and is in default.The Burger Bar is bankrupt and Janet decides to sue Bruce in his individual capacity.
-If the reasoning of the case in the text,Athanasios Valsamis v.Néstor Gonzáles-Romero is followed,what would Janet have to prove in court?

Accepted Answer

A)  Janet does not have to prove anything,as the burden would shift to Bruce to prove an agreement did not exist.
B)  Janet must prove money is due and Bruce is the responsible party.
C)  Janet must prove money is due.
D)  Janet must prove money is due and The Burger Bar is the responsible party.
E)  Janet must prove The Burger Bar is the responsible party.F) All of the above
G) A) and B)

Question 7

What is the effect of Hye agreeing to give Sam a DVD in return for the book?

Accepted Answer

A)  Unless Sam acknowledges in writing that the fair market value of the DVD is equivalent to the value of the book he provided to Hye,there is no enforceable contract nor is the agreement negotiable.
B)  Because payment is not in a sum certain for money,Hye and Sam do not have an enforceable contract,but the requirement of negotiability regarding the form of payment has been satisfied.
C)  Because payment is not in a sum certain for money,Hye and Sam do not have an enforceable contract nor does the agreement satisfy the negotiability requirement that payment be in a sum certain in money.
D)  Hye and Sam have an enforceable contract,but the agreement fails to satisfy the negotiability requirement that payment be in a sum certain in money.
E)  Hye and Sam have an enforceable contract,and Hye has also satisfied the negotiability condition regarding the form of payment.F) A) and B)
G) C) and D)

Question 8

In order to satisfy the requirement of negotiability that payment be at a time certain or on demand,acceleration of payment is not allowable.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  The instrument is not negotiable only for the reason that it is not for a sum certain.
B)  The instrument is not negotiable only for the reason that Caileen is not a merchant.
C)  The instrument is negotiable.
D)  The instrument is not negotiable only for the reason that it is based on a condition.
E)  The instrument is not negotiable because it is based on a condition and also because it is not for a sum certain.F) A) and B)
G) A) and C)

Question 10

What is the UCC's definition of an instrument that is "payable on demand?"

Accepted Answer

A)  An instrument that states that it is payable 30 days after presentment
B)  An instrument that states that it is payable on demand or at sight or otherwise indicates that it is payable at the will of the holder,or does not state any time of payment
C)  Is payable within 10 days after presentment
D)  An instrument that states that it is payable on demand or at sight,or that it is payable 20 days after presentment
E)  An instrument that states that it is payable on demand or at sight or otherwise indicates that it is payable at the will of the holder;does not state any time of payment;or is payable within ten days after presentmentF) C) and D)
G) None of the above

Exam 26: Negotiable Instruments: Negotiability and Transferability

Correct Answer
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What is the UCC's definition of an instrument that is "payable on demand?"

Correct Answer
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Under the UCC,what role does Auto Repair hold?

Correct Answer
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What is the effect of Hye agreeing to give Sam a DVD in return for the book?

Correct Answer
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List the seven requirements for an instrument to be negotiable.

Correct Answer
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The seven requiremen...
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Which of the following is not a bearer instrument?

Correct Answer
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In order to satisfy the requirement of negotiability that payment be at a time certain or on demand,acceleration of payment is not allowable.

Correct Answer
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Correct Answer
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Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

Correct Answer
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Which is the correct term for a promise made by a bank to pay a payee a certain amount of money at a future time?

Correct Answer
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Exam 26: Negotiable Instruments: Negotiability and Transferability

Correct AnswerverifiedShow Answer

What is the UCC's definition of an instrument that is "payable on demand?"

Correct AnswerverifiedShow Answer

Under the UCC,what role does Auto Repair hold?

Correct AnswerverifiedShow Answer

What is the effect of Hye agreeing to give Sam a DVD in return for the book?

Correct AnswerverifiedShow Answer

List the seven requirements for an instrument to be negotiable.

Correct AnswerverifiedThe seven requiremen...View AnswerShow Answer

Which of the following is not a bearer instrument?

Correct AnswerverifiedShow Answer

In order to satisfy the requirement of negotiability that payment be at a time certain or on demand,acceleration of payment is not allowable.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

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Which is the correct term for a promise made by a bank to pay a payee a certain amount of money at a future time?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The seven requiremen...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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