Question 1

Even the mention of another document in an instrument prevents the instrument from being negotiable.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following was the result in State v.Warner,the case in the text involving whether an electronic transfer qualified as a "draft" or "other written statement" for purposes of establishing a violation of state law?

Accepted Answer

A)   That an electronic transfer qualified as a draft or other written statement for purposes of establishing a violation of the state law at issue.
B)   That an electronic transfer did not qualify as a draft or other written statement for purposes of establishing a violation of the state law at issue.
C)   That an electronic transfer qualified as a draft or other written statement for purposes of establishing a violation of the state law at issue only if it could be established that a bank official described the transaction as a "draft."
D)   That an electronic transfer qualified as a draft or other written statement for purposes of establishing a violation of the state law at issue only if it could be established that a bank official described the transaction as a "negotiable."
E)   That the issue of whether the instrument was a draft or other written statement was irrelevant because the state law at issue was unconstitutional.F) C) and E)
G) D) and E)

Question 3

The words "pay to cash" are sufficient words of negotiability.

Accepted Answer

A) True 
 B)False

Question 4

A certificate of deposit is a ______ of the bank.

Accepted Answer

A)   note
B)   draft
C)   novation
D)   check
E)   promissory contractF) A) and B)
G) None of the above

Question 5

The law does not permit an oral negotiable instrument.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a check accepted by the bank on which it is drawn?

Accepted Answer

A)   Cashier's check
B)   Traveler's check
C)   Certified check
D)   Check certificate
E)   Approved draftF) None of the above
G) A) and E)

Question 7

Which of the following was the result in Samuel James Thompson v.First Citizens Bank & Trust Co.,the case in the text in which the parties disagreed as to whether an instrument referenced as a certificate of deposit was actually negotiable?

Accepted Answer

A)   The court ruled that the instrument was negotiable.
B)   The court ruled that the instrument was not negotiable because it clearly stated that it was non-transferable.
C)   The court ruled that the instrument was not negotiable because it lacked the signatures of both parties.
D)   The court ruled that the instrument was not negotiable because it lacked the signature of a bank representative.
E)   The court ruled that the instrument was not negotiable because it contained a condition precedent and was not an unconditional order to pay.F) A) and C)
G) A) and E)

Question 8

A note is a promise,by the maker of the note,to pay a payee.

Accepted Answer

A) True 
 B)False

Question 9

Set forth the seven requirements for an instrument to be negotiable.

Accepted Answer

The seven requirements for an instrument...

Question 10

Considering only the issue of terminology,not the issue of handwriting or whether Paula properly performed,which of the following is true regarding whether the language "I,John Jones,owe Paula Smith $50" is insufficient to establish elements required for a negotiable instrument?

Accepted Answer

A)   The language is sufficient because it acknowledges the debt, and that is the only required standard.
B)   The language is insufficient because it only acknowledges the debt and is not a promise to pay.
C)   The language is sufficient only because the instrument is in an amount under $500.
D)   The language is sufficient because it acknowledges the debt and is also a promise to pay.
E)   The language is sufficient because it acknowledges the debt and is unconditional.F) B) and E)
G) B) and D)

Question 11

If an instrument fails to qualify as a negotiable instrument,that means that the instrument fails to be an enforceable contract.

Accepted Answer

A) True 
 B)False

Question 12

Documents used as payments to facilitate commercial transactions were originally generically called ____.

Accepted Answer

A)   Negotiable instruments
B)   Commercial paper
C)   Promissory paper
D)   Commerce notes
E)   Payment notesF) C) and D)
G) A) and D)

Question 13

Which of the following is true regarding the effect on negotiability of John's determination that Paula did a poor job mowing the yard?

Accepted Answer

A)   Paula's performance prevents the instruments from being negotiable only if John meets the burden of proof of establishing to the judge by a preponderance of the evidence that Paula did a poor job mowing the yard.
B)   Paula's performance prevents the instruments from being negotiable only if Paula meets the burden of proof of establishing to the judge by a preponderance of the evidence that she did an acceptable job mowing the yard.
C)   Paula's performance prevents the instruments from being negotiable only if John meets the burden of proof of establishing to the judge by a preponderance of the evidence that Paula did a poor job mowing the yard, and if Paula signed and provided to John a document agreeing that the instrument would lack negotiability unless she properly performed.
D)   Paula's performance prevents the instruments from being negotiable only if Paula meets the burden of proof of establishing to the judge by a preponderance of the evidence that she did an acceptable job mowing the yard and that she did not sign any document agreeing that the instrument would lack negotiability upon John's objection.
E)   Manner of performance is not one of the listed elements for a finding of negotiability.F) A) and B)
G) B) and C)

Question 14

Which of the following is a written document containing the signature of the creator that makes an unconditional promise or order to pay a sum certain in money at either a time certain or on demand?

Accepted Answer

A)   A negated instrument
B)   A promised instrument
C)   A negotiable instrument
D)   A promissory agreement
E)   A negotiable agreementF) A) and C)
G) A) and E)

Question 15

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

Accepted Answer

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

Question 16

An automated signature satisfies the UCC requirement that the signature of the creator appear in order for an instrument to be negotiable.

Accepted Answer

A) True 
 B)False

Question 17

Disregarding the issue of whether Paula properly performed,is the statement "I,John Jones,promise to pay Paula Smith or to bearer,the sum of $100 on Monday,July 22,2008," without a signature anywhere else on the document,sufficient to satisfy the signature requirement of negotiability?

Accepted Answer

A)   Yes, because it contains an unconditional promise to pay; and in the handwritten promise, the maker wrote his own name.
B)   Yes, it is sufficient regardless of whether it is in handwriting or not because it contains an unconditional promise to pay.
C)   No, because it was not signed at the bottom.
D)   Yes, but only if John later signed another document confirming that he meant the handwritten statement to constitute his signature.
E)   No, because it was not signed at the bottom or anywhere else on the document.F) A) and C)
G) A) and B)

Question 18

Which of the following is an example of a negotiable instrument?

Accepted Answer

A)   Checks but not drafts or promissory notes
B)   Drafts and checks, but not promissory notes
C)   Promissory notes, but not drafts or checks
D)   Promissory notes and checks, but not drafts
E)   Checks, drafts, and promissory notesF) A) and D)
G) B) and D)

Question 19

The UCC defines an instrument "payable on demand" as one that ____.

Accepted Answer

A)   States that it is payable on demand or at sight, or that it is payable 20 days after presentment
B)   States that it is payable 30 days after presentment
C)   Is payable within 10 days after presentment
D)   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
E)   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) A) and B)
G) A) and C)

Question 20

Which of the following is true regarding negotiation of an instrument?

Accepted Answer

A)   Negotiation of both an order instrument and bearer instrument is by delivery alone.
B)   Negotiation of both an order instrument and bearer instrument require endorsement plus delivery.
C)   Negotiation of an order instrument is by endorsement plus delivery, while negotiation of a bearer instrument is by delivery alone.
D)   Negotiation of a bearer instrument is by endorsement plus delivery, while negotiation of an order instrument is by delivery alone.
E)   Negotiation of both an order instrument and a bearer instrument requires both delivery and an additional three days to allow for bank clearance.F) A) and D)
G) A) and E)

Exam 26: Negotiable Instruments: Negotiability and Transferability

Which of the following is a written document containing the signature of the creator that makes an unconditional promise or order to pay a sum certain in money at either a time certain or on demand?

Correct AnswerverifiedShow Answer

If an instrument fails to qualify as a negotiable instrument,that means that the instrument fails to be an enforceable contract.

Correct AnswerverifiedShow Answer

A certificate of deposit is a ______ of the bank.

Correct AnswerverifiedShow Answer

The law does not permit an oral negotiable instrument.

Correct AnswerverifiedShow Answer

An automated signature satisfies the UCC requirement that the signature of the creator appear in order for an instrument to be negotiable.

Correct AnswerverifiedShow Answer

Which of the following is a check accepted by the bank on which it is drawn?

Correct AnswerverifiedShow Answer

Even the mention of another document in an instrument prevents the instrument from being negotiable.

Correct AnswerverifiedShow Answer

Considering only the issue of terminology,not the issue of handwriting or whether Paula properly performed,which of the following is true regarding whether the language "I,John Jones,owe Paula Smith $50" is insufficient to establish elements required for a negotiable instrument?

Correct AnswerverifiedShow Answer

Which of the following was the result in Samuel James Thompson v.First Citizens Bank & Trust Co.,the case in the text in which the parties disagreed as to whether an instrument referenced as a certificate of deposit was actually negotiable?

Correct AnswerverifiedShow Answer

The words "pay to cash" are sufficient words of negotiability.

Correct AnswerverifiedShow Answer

Set forth the seven requirements for an instrument to be negotiable.

Correct AnswerverifiedThe seven requirements for an instrument...View AnswerShow Answer

Which of the following is true regarding negotiation of an instrument?

Correct AnswerverifiedShow Answer

Which of the following was the result in State v.Warner,the case in the text involving whether an electronic transfer qualified as a "draft" or "other written statement" for purposes of establishing a violation of state law?

Correct AnswerverifiedShow Answer

Documents used as payments to facilitate commercial transactions were originally generically called ____.

Correct AnswerverifiedShow Answer

Which of the following is an example of a negotiable instrument?

Correct AnswerverifiedShow Answer

The UCC defines an instrument "payable on demand" as one that ____.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Disregarding the issue of whether Paula properly performed,is the statement "I,John Jones,promise to pay Paula Smith or to bearer,the sum of $100 on Monday,July 22,2008," without a signature anywhere else on the document,sufficient to satisfy the signature requirement of negotiability?

Correct AnswerverifiedShow Answer

A note is a promise,by the maker of the note,to pay a payee.

Correct AnswerverifiedShow Answer

Which of the following is true regarding the effect on negotiability of John's determination that Paula did a poor job mowing the yard?

Correct AnswerverifiedShow Answer

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The seven requirements for an instrument...
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