Question 1

[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.
-Before Mehdi endorsed the check it was a[n] ________ instrument; and after he endorsed it, the check was a[n] ________ instrument.

Accepted Answer

A)   Order; order
B)   Order; transactional
C)   Order; bearer
D)   Transactional; bearer
E)   Bearer; bearerF) C) and D)
G) A) and E)

Question 2

A currency or cash substitute has existed for centuries in Anglo-American law.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is true regarding negotiable instruments as compared to contracts?

Accepted Answer

A)   Similar to contracts, negotiable instruments require consideration.
B)   Similar to contracts, negotiable instruments require offer and acceptance; but unlike contracts, negotiable instruments do not require consideration.
C)   A negotiable instrument is a form of a contract and may be referred to as such.
D)   Negotiable instruments lack the requirements of contracts involving consideration, offer, and acceptance.
E)   Negotiable instruments require the same elements as contracts in regard to consideration, offer and acceptance.F) B) and E)
G) C) and D)

Question 4

Which of the following is not required for an instrument to be considered negotiable?

Accepted Answer

A)   The instrument must contain an unconditional promise to pay.
B)   The instrument must promise to pay a fixed amount of currency.
C)   The instrument must be payable at any indefinite future time.
D)   The instrument must promise to pay.
E)   The instrument must be signed by the maker or drawer.F) D) and E)
G) B) and D)

Question 5

An instrument fails to be negotiable because it states, "payment will be made by $100 and a rare antique vase." Which of the following scenarios would render the instrument negotiable?

Accepted Answer

A)   The instrument changes "and" to "or."
B)   The instrument omits $100.
C)   The instrument omits the rare antique vase.
D)   The instrument omits how payment will be made.
E)   The payment clause as-is does not preclude the instrument from being negotiable.F) None of the above
G) A) and B)

Question 6

A(n)  ________ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account?

Accepted Answer

A)   annual contract
B)   certificates of deposit
C)   note
D)   applied instrument
E)   checkF) B) and D)
G) A) and B)

Question 7

All negotiable documents should be in electronic format.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a note of the bank where a payee purchases it and collects principle plus a set amount of interest in the future?

Accepted Answer

A)   Certificate of deposit
B)   Cashier's check
C)   Certified check
D)   Traveler's check
E)   DraftF) B) and C)
G) A) and E)

Exam 26: Negotiable Instruments: Negotiability and Transferability

A(n) ________ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account?

Correct Answer
verified

A currency or cash substitute has existed for centuries in Anglo-American law.

Correct Answer
verified

Which of the following is a note of the bank where a payee purchases it and collects principle plus a set amount of interest in the future?

Correct Answer
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Which of the following is true regarding negotiable instruments as compared to contracts?

Correct Answer
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Which of the following is not required for an instrument to be considered negotiable?

Correct Answer
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An instrument fails to be negotiable because it states, "payment will be made by $100 and a rare antique vase." Which of the following scenarios would render the instrument negotiable?

Correct Answer
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Correct Answer
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All negotiable documents should be in electronic format.

Correct Answer
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Exam 26: Negotiable Instruments: Negotiability and Transferability

A(n) ________ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account?

Correct AnswerverifiedShow Answer

A currency or cash substitute has existed for centuries in Anglo-American law.

Correct AnswerverifiedShow Answer

Which of the following is a note of the bank where a payee purchases it and collects principle plus a set amount of interest in the future?

Correct AnswerverifiedShow Answer

Which of the following is true regarding negotiable instruments as compared to contracts?

Correct AnswerverifiedShow Answer

Which of the following is not required for an instrument to be considered negotiable?

Correct AnswerverifiedShow Answer

An instrument fails to be negotiable because it states, "payment will be made by $100 and a rare antique vase." Which of the following scenarios would render the instrument negotiable?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All negotiable documents should be in electronic format.

Correct AnswerverifiedShow Answer

Correct Answer
verified

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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Correct Answer
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Correct Answer
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