Question 1

The Revised Article 3 of the UCC provides that a check which meets all requirements of being a negotiable instrument, except that it is not payable to bearer or order, is nevertheless a negotiable instrument.

Accepted Answer

A) True 
 B)False

Question 2

A __________ is a specialized form of promise to pay money given by a maker in which the bank is the maker.

Accepted Answer

A)   note
B)   certificate of deposit
C)   trade acceptance
D)   cashier's checkE) A) and B)
F) A) and C)

Question 3

Under the Check 21 Act:

Accepted Answer

A)   banks must accept checks in electronic form.
B)   banks are permitted to truncate original checks and process check information electronically.
C)   banks must create substitute checks which are the legal equivalent of the original checks.
D)   banks must keep the paper checks on file for 90 days.E) C) and D)
F) B) and D) B

Question 4

All but which one of the following is required of a negotiable instrument?

Accepted Answer

A)   It must be payable only out of a particular fund.
B)   It must contain an unconditional promise or order to pay a fixed amount in money.
C)   It must be payable on demand or at a definite future date.
D)   It must be in writing and signed by the maker or drawer.E) A) and B)
F) A) and C)

Question 5

Which of the following would be an unconditional promise or order to pay?

Accepted Answer

A)   "I hereby acknowledge my debt to John Jones."
B)   "I hereby promise to pay $2,000 to John Jones provided the lawn tractor sold meets the contractual specifications."
C)   "Pay to the order of bearer ten dollars."
D)   "IOU fifty dollars."E) A) and B)
F) C) and D)

Question 6

An incomplete instrument is not negotiable. However, when it is completed, it may become negotiable.

Accepted Answer

A) True 
 B)False

Question 7

Which article of the UCC governs "negotiable instruments"?

Accepted Answer

A)   Article 6.
B)   Article 2.
C)   Article 3.
D)   Article 9.E) None of the above
F) A) and B)

Question 8

Revised Article 1 of the UCC states that the "money" requirement for a negotiable instrument means the current official currency of the government, not just a medium of exchange authorized or adopted by a sovereign government as part of its currency.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following does not fulfill the requirements of being payable to bearer according to t he UCC?

Accepted Answer

A)   states it is payable to bearer or the order of bearer.
B)   does not state a payee.
C)   states it is payable to "cash" or to the order of "cash."
D)   the payee's name is spelled wrong.E) B) and D)
F) A) and B)

Question 10

Distinguish between a note and a certificate of deposit. How are they alike? How are they different? Explain your answer.

Accepted Answer

Notes and CD's are two-party instruments involving a maker and a payee. They are alike in that in each case one party promises to pay the other party money. They are different in that with a certificate of deposit, a bank is receiving money, acknowledging it, and promising to repay it. A CD is a specialized form of promissory note.

Question 11

A draft involves three parties: a drawer, a drawee, and a payee.

Accepted Answer

A) True 
 B)False

Question 12

Explain the effect that a reference to other agreements has on negotiable instruments and the difference between a mere reference and a negotiable instrument's being subject to the terms of another agreement.

Accepted Answer

A reference to the mere existence of ano...

Question 13

Which of the following has been held to destroy the negotiability of an instrument and to render its transfer a contractual assignment?

Accepted Answer

A)   "I wish you would pay."
B)   "Pay to the order of John Jones."
C)   "Pay bearer."
D)   "Please pay Sue Smith."E) A) and D)
F) B) and C)

Question 14

Revised Article 3 eliminates the particular fund doctrine by providing that a promise or order is not made conditional because payment is to be made only out of a particular fund.

Accepted Answer

A) True 
 B)False

Question 15

Negotiability invests negotiable instruments with a high degree of marketability and commercial utility by allowing them to be freely transferable and enforceable by a person with the rights of a holder in due course against a person obligated on the instrument.

Accepted Answer

A) True 
 B)False

Question 16

A certificate of deposit differs from a promissory note in that:

Accepted Answer

A)   the maker is always a bank.
B)   there are three parties to the transaction.
C)   the payee of a CD must be paid on demand.
D)   the maker can be a bank  or an individual.E) A) and B)
F) All of the above

Question 17

A reference in a negotiable instrument to the existence of a separate agreement to which it is subject destroys the negotiability of the instrument.

Accepted Answer

A) True 
 B)False  True

Question 18

Bill goes to First Bank to get a loan. He signs a note and agrees to repay the bank. What is the legal term for Bill's status regarding the note?

Accepted Answer

A)   Payee.
B)   Maker.
C)   Payor.
D)   Drawer.E) All of the above
F) C) and D)

Question 19

Which of the following will destroy negotiability?

Accepted Answer

A)   Making the instrument subject to the terms of another agreement.
B)   Making the instrument payable in Japanese yen.
C)   Signing a check in pencil.
D)   Signing a check with an "X."E) B) and C)
F) B) and D)

Question 20

An "X" or a thumbprint could constitute a signature within the meaning of the term in the Code.

Accepted Answer

A) True 
 B)False

Exam 24: Form and Content

The Revised Article 3 of the UCC provides that a check which meets all requirements of being a negotiable instrument, except that it is not payable to bearer or order, is nevertheless a negotiable instrument.

Correct Answer
verified

A __________ is a specialized form of promise to pay money given by a maker in which the bank is the maker.

Correct Answer
verified

Under the Check 21 Act:

Correct Answer
verified
B

All but which one of the following is required of a negotiable instrument?

Correct Answer
verified

Which of the following would be an unconditional promise or order to pay?

Correct Answer
verified

An incomplete instrument is not negotiable. However, when it is completed, it may become negotiable.

Correct Answer
verified

Which article of the UCC governs "negotiable instruments"?

Correct Answer
verified

Revised Article 1 of the UCC states that the "money" requirement for a negotiable instrument means the current official currency of the government, not just a medium of exchange authorized or adopted by a sovereign government as part of its currency.

Correct Answer
verified

Which of the following does not fulfill the requirements of being payable to bearer according to t he UCC?

Correct Answer
verified

Distinguish between a note and a certificate of deposit. How are they alike? How are they different? Explain your answer.

A draft involves three parties: a drawer, a drawee, and a payee.

Correct Answer
verified

Explain the effect that a reference to other agreements has on negotiable instruments and the difference between a mere reference and a negotiable instrument's being subject to the terms of another agreement.

Correct Answer
verified
A reference to the mere existence of ano...
View Answer

Which of the following has been held to destroy the negotiability of an instrument and to render its transfer a contractual assignment?

Correct Answer
verified

Revised Article 3 eliminates the particular fund doctrine by providing that a promise or order is not made conditional because payment is to be made only out of a particular fund.

Correct Answer
verified

Negotiability invests negotiable instruments with a high degree of marketability and commercial utility by allowing them to be freely transferable and enforceable by a person with the rights of a holder in due course against a person obligated on the instrument.

Correct Answer
verified

A certificate of deposit differs from a promissory note in that:

Correct Answer
verified

A reference in a negotiable instrument to the existence of a separate agreement to which it is subject destroys the negotiability of the instrument.

Correct Answer
verified
True

Bill goes to First Bank to get a loan. He signs a note and agrees to repay the bank. What is the legal term for Bill's status regarding the note?

Correct Answer
verified

Which of the following will destroy negotiability?

Correct Answer
verified

An "X" or a thumbprint could constitute a signature within the meaning of the term in the Code.

Correct Answer
verified

Exam 24: Form and Content

The Revised Article 3 of the UCC provides that a check which meets all requirements of being a negotiable instrument, except that it is not payable to bearer or order, is nevertheless a negotiable instrument.

Correct AnswerverifiedShow Answer

A __________ is a specialized form of promise to pay money given by a maker in which the bank is the maker.

Correct AnswerverifiedShow Answer

Under the Check 21 Act:

Correct AnswerverifiedB

All but which one of the following is required of a negotiable instrument?

Correct AnswerverifiedShow Answer

Which of the following would be an unconditional promise or order to pay?

Correct AnswerverifiedShow Answer

An incomplete instrument is not negotiable. However, when it is completed, it may become negotiable.

Correct AnswerverifiedShow Answer

Which article of the UCC governs "negotiable instruments"?

Correct AnswerverifiedShow Answer

Revised Article 1 of the UCC states that the "money" requirement for a negotiable instrument means the current official currency of the government, not just a medium of exchange authorized or adopted by a sovereign government as part of its currency.

Correct AnswerverifiedShow Answer

Which of the following does not fulfill the requirements of being payable to bearer according to t he UCC?

Correct AnswerverifiedShow Answer

Distinguish between a note and a certificate of deposit. How are they alike? How are they different? Explain your answer.

A draft involves three parties: a drawer, a drawee, and a payee.

Correct AnswerverifiedShow Answer

Explain the effect that a reference to other agreements has on negotiable instruments and the difference between a mere reference and a negotiable instrument's being subject to the terms of another agreement.

Correct AnswerverifiedA reference to the mere existence of ano...View AnswerShow Answer

Which of the following has been held to destroy the negotiability of an instrument and to render its transfer a contractual assignment?

Correct AnswerverifiedShow Answer

Revised Article 3 eliminates the particular fund doctrine by providing that a promise or order is not made conditional because payment is to be made only out of a particular fund.

Correct AnswerverifiedShow Answer

Negotiability invests negotiable instruments with a high degree of marketability and commercial utility by allowing them to be freely transferable and enforceable by a person with the rights of a holder in due course against a person obligated on the instrument.

Correct AnswerverifiedShow Answer

A certificate of deposit differs from a promissory note in that:

Correct AnswerverifiedShow Answer

A reference in a negotiable instrument to the existence of a separate agreement to which it is subject destroys the negotiability of the instrument.

Correct AnswerverifiedTrue

Bill goes to First Bank to get a loan. He signs a note and agrees to repay the bank. What is the legal term for Bill's status regarding the note?

Correct AnswerverifiedShow Answer

Which of the following will destroy negotiability?

Correct AnswerverifiedShow Answer

An "X" or a thumbprint could constitute a signature within the meaning of the term in the Code.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A reference to the mere existence of ano...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified