test 3 Flashcards Preview

Business Law > test 3 > Flashcards

Flashcards in test 3 Deck (107)
Loading flashcards...
1

TRUE/FALSE CH 29

1. An instrument may be transferred by negotiation or by assignment.

True

2

TRUE/FALSE Ch 29

2. When a negotiable instrument is transferred by negotiation, the transferee is recognized as the holder of the paper.

True

3

TRUE/FALSE Ch 29

3. A holder of the paper has immunity from certain defenses that might have been asserted against the transferor.

False

4

TRUE/FALSE Ch 29

4. A holder is also known as an assignee of the paper

False

5

TRUE/FALSE CH 29

5. An instrument that originally was bearer paper always remains bearer paper.

False

6

TRUE/FALSE Ch 29

6. The order or bearer character of a paper is determined as of the time when the negotiation is about to take place.

True

7

TRUE/FALSE Ch 29

7. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.

True

8

TRUE/FALSE Ch 29

8. Bearer paper may only be negotiated by the actual transfer of possession of the instrument.

False

9

TRUE/FALSE Ch 29

9. Order paper is negotiated by the indorsement of the holder and delivery.

True

10

TRUE/FALSE Ch 29

10. Indorsements may be classified in terms of whether the indorser has added any words to the indorsement and what those words are.

True

11

TRUE/FALSE Ch 29

11. A blank indorsement indicates the person to whom the instrument is to be paid-that is, the transferee.

False

12

TRUE/FALSE Ch 29

12. A person who acquires the instrument on which the last indorsement is blank becomes the holder.

True

13

TRUE/FALSE Ch 29

13. Order paper is converted into bearer paper by the holder's blank indorsement.

True

14

TRUE/FALSE Ch 29

14. When a special indorsement is made, the instrument continues to be order paper and may be negotiated only by an indorsement and delivery.

True

15

TRUE/FALSE Ch 29

15. A special indorsement consists of the signature of the indorser and the words identifying the person to whom the indorser makes the instrument payable.

True

16

TRUE/FALSE Ch 29

16. An indorsement "Pay to Donald Hames, Cathy Dukes" is not a valid indorsement because it does not contain the words "order" or "bearer."

False

17

TRUE/FALSE Ch 29

17. A qualified indorsement qualifies the effect of a blank or special indorsement by disclaiming certain liabilities of the indorser to a maker or drawee.

True

18

TRUE/FALSE Ch 29

18. A restrictive indorsement specifies the purpose of the indorsement or the use to be made of the paper.

True

19

TRUE/FALSE Ch 29

19. If an instrument bears a restrictive indorsement, any further transfer or negotiation is effectively barred.

False

20

TRUE/FALSE Ch 29

20. A payee or indorsee whose name is misspelled may indorse the wrong name, the correct name, or both.

True

21

TRUE/FALSE Ch 29

21. The transfer and collection of negotiable instruments between banks requires specific indorsements.

False

22

TRUE/FALSE Ch 29

22. If an instrument is payable to alternative payees or if it has been negotiated to alternative indorsees, it may be indorsed and delivered by either of them.

True

23

TRUE/FALSE Ch 29

23. If an instrument is drawn in favor of an officer of a named corporation, the instrument is payable to the corporation, the officer, or any successor to such officer.

True

24

TRUE/FALSE Ch 29

24. Under the UCC, a negotiation is not effective when it is made by a minor or any other person lacking capacity.

False

25

TRUE/FALSE Ch 29

25. It is worse for the holder to lose order paper than to lose bearer paper.

False

26

TRUE/FALSE Ch 29

26. If a lost negotiable instrument is in bearer form at the time of the loss, the finder is entitled to enforce payment.

True

27

TRUE/FALSE Ch 29

27. The warranties made by an unqualified indorser guarantee that payment of the instrument will be made.

False

28

TRUE/FALSE Ch 29

28. Thomas, the holder of a check, presents it to the drawee bank for payment. If Thomas indorses the check, Thomas warrants that the account of the drawer in the drawee bank contains funds sufficient to cover the check.

False

29

TRUE/FALSE Ch 29

29. To enforce an implied warranty of an indorser, the party claiming under the warranty must give the indorser notice of the breach within fourteen (14) days after the claimant learns or has reason to know of the breach and the identity of the indorser.

False

30

TRUE/FALSE Ch 29

30. The warranty liability of a qualified indorser is the same as that of an unqualified indorser.

True