0324655223_122455 - CLARKSON-11E APPENDIX I: SAMPLE ANSWERS...

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C LARKSON -11 E A PPENDIX I: S AMPLE A NSWERS FOR E ND - OF -C HAPTER Q UESTIONS WITH S AMPLE A NSWER Chapter 25: Transferability and Holder in Due Course 25–2. Question with Sample Answer Celine issues a ninety-day negotiable promissory note payable to the order of Hayden. The amount of the note is left blank, pending a determination of the amount that Hayden will need to purchase a used car for Celine. Celine authorizes any amount not to exceed $2,000.Hayden,without authority, fills in the note in the amount of $5,000 and thirty days later sells the note to First National Bank of Oklahoma for $4,850. Hayden does not buy the car and leaves the state. First National Bank has no knowledge that the instrument was incomplete when issued or that Hayden had no authority to complete the instrument in the amount of $5,000. (a) Does the bank qualify as a holder in due course? If so, for what amount? Explain.
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This note was uploaded on 11/14/2009 for the course BUS 2200 taught by Professor Staff during the Spring '08 term at Salt Lake Community College.

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0324655223_122455 - CLARKSON-11E APPENDIX I: SAMPLE ANSWERS...

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