Negotiable Instruments - Module 1 of 6

Question 1

The system of rules that created a stable payments system for merchants in the Middle Ages was called the

Question 2

Which of the following associated designations is correct?

Question 3

Arthur is in possession of a check payable to him but not yet indorsed. He is a

Question 4

Which of the following references on a promissory note will destroy negotiability?

Question 5

The statute that allows checks to be stored and transmitted digitally is

Question 6

Order paper can be converted to bearer paper with a(n)

Question 7

Sara writes a check to Frank who gives it as payment on a debt owed to Bill. Frank does not indorse the check. Bill

Question 8

Stephen buys furniture on credit from Victor who is a furniture dealer. Victor sells Stephen’s promissory note to First Finance Company after Stephen has already paid the entirety of his debt on his furniture purchase. First Finance had no indication or reason to know that Stephen had paid off the note. The finance company’s attempt to collect payment from Stephen will

Question 9

Marion bought a car on credit from John’s Auto company and John sold Marion’s promissory note to First Finance Company. Unknown to First Finance, Marion has been declared legally incompetent by a court and her court-appointed guardian was not present for the sale of the car. Under state law her guardian could elect to void any contracts to which he did not give his assent on Marion’s behalf and the car sales contract was therefore voidable under state law. First Finance did not know of Marion’s incompetency and attempts to collect payment from Marion but her guardian refuses to pay. What should the result be?

Question 10

Blaine writes a check to pay Samantha for his dry-cleaning bill payable to Samantha. Samantha indorses the check and pays her 10-year-old nephew James for cutting her lawn. James fails to indorse it and gives it as a gift to his 9-year-old playmate, Sally. Assume contracts with minors are voidable. Can Sally cash the check?