CONTRACTS 12

Question 1

Assignment

Answer 1

The transfer of rights under a contract.

Question 2

Assignor

Answer 2

A transferor in an assignment situation.

Question 3

Assignee

Answer 3

A transferee in an assignment situation.

Question 4

Negotiation

Answer 4

The transfer of a negotiable instrument by a person other than the issuer to a person who thereby becomes a holder.

Question 5

Order Paper

Answer 5

An instrument that is negotiable by delivery and indorsement

Question 6

Bearer Paper

Answer 6

An instrument that is negotiated by delivery; indorsement is not necessary.

Question 7

Indorsement

Answer 7

The signature (and other directions) written by or on behalf of the holder somewhere on an instrument.

Question 8

Indorser

Answer 8

A person who indorses a negotiable instrument.

Question 9

Indorsee

Answer 9

A person to whom a negotiable instrument is indorsed.

Question 10

Allonge

Answer 10

A separate piece of paper attached of an instrument on which an indorsement is written.

Question 11

Blank Indorsement

Answer 11

An indorsement that does not specify a particular indorsee.

Question 12

Special Indorsement

Answer 12

An indorsement that contains the signatures of the indorser and specifies the person (indorsee) to whom the indorser intends the instrument to be payable. It creates order paper.

Question 13

Unqualified Indorsement

Answer 13

An indorsement whereby the indorser promises to pay the holder or any subsequent indorser the amount of the instrument if the maker, drawer, or acceptor defaults on it.

Question 14

Unqualified Indorser

Answer 14

An indorser who signs an unqualified indorsement to an instrument.

Question 15

Qualified Indorsement

Answer 15

An indorsement that includes the notation “without recourse” or similar language that disclaims liability of the indorser.

Question 16

Qualified indorser

Answer 16

An indorser who signs a qualified indorsement of an instrument

Question 17

Nonrestrictive Indorsement

Answer 17

An indoresement that has no instructions or conditions attached to the payment of the funds.

Question 18

Restrictive Indorsement

Answer 18

An indorsement that contains some sort of instruction from the indorser.

Question 19

Indorsement for Deposit or Collection

Answer 19

An indorsement that makes the indorsee the indorser’s collecting agent.

Question 20

Holder

Answer 20

A person who is in possession of a negotiable instrument that is drawn, issued or indorsed to him or his order, bearer or in blank.

Question 21

Holder in Due Course (HDC)

Answer 21

A holder who takes a negotiable instrument for value, in good faith, and without notice that it is defective or overdue

Question 22

Taking for Value Requirement

Answer 22

A requirement that says a holder must give value for a negotiable instrument in order to qualify as an HDC

Question 23

Taking in Good Faith Requirement

Answer 23

A requirement that says a holder must take the instrument in good faith in order to qualify as an HDC.

Question 24

Good Faith

Answer 24

Honesty in fact in the conduct or transaction concerned. The good faith test is subjective.

Question 25

Taking without Notice of Defect Requirement

Answer 25

A requirement that says a person cannot qualify as an HDC if she has notice that the instrument is defective in certain ways.

Question 26

Time Instrument

Answer 26

An instrument that specifies a definite date for payment of the instrument.

Question 27

Demand Instrument

Answer 27

An instrument payable on demand.

Question 28

Dishonored Instrument

Answer 28

An instrument that is presented for payment and payment is refused.

Question 29

Red Light Doctrine

Answer 29

A doctrine that says a holder cannot qualify as an HDC if she has notice of an unauthorized signature or an alteration of the instrument or any adverse claim against or defense of its payment.

Question 30

No Evidence of Forgery, Alteration, or Irregularity Requirement

Answer 30

A requirement that says a holder cannot become an HDC to an instrument that is apparently forged or altered or is so otherwise irregular or incomplete as to call into question its authenticity.