Negotiable Instruments Practice T-F questions Leibson

Negotiable Instruments Practice T-F questions Leibson -...

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Negotiable T/F 1. D delivered his personal check to the order of P in return for goods sold by P. P lost the check. P can still recover the amount of the check from D. True. S. 3-309 permits an owner of a lost instrument to recover from the party liable thereon on due proof of ownership and of the facts that prevent production of the instrument. 2. D delivered his personal check to the order of P in return for goods sold by P. P took the check to the drawee bank and had it certified. P can still recover the amount of the check from D. False. P is a holder of the check. 3-414© provides that where a draft is accepted by a bank, as in the case of certification, the drawer of the check is discharged. 3. D delivered his personal check to the order of P in return for goods sold by P. P took the check to the drawee bank and had it certified. P can still recover the amount of the check from the drawee bank. True. A drawee bank that certifies a check has accepted it and is therefore liable on it. 4. M borrowed $1000 from P and gave P in return a writing promising to pay $1200 to P’s order “when I obtain an acceptable loan”. P is a holder in due course of the writing. False. Although a payee may be a holder in due course, no one may be a holder in due course unless in possession of a negotiable instrument. The writing given by M is not payable at a definite time or on demand and is therefore not a negotiable instrument. 5. M purchased construction equipment from P and gave P in return a writing promising to pay the amount due to P’s order “from revenues obtained from construction of the building at 100 main street.” P is a holder in due course of the writing. True. Again, a payee may be a holder in due course. This writing is a negotiable instrument under the revision, even though payment is restricted to a particular fund. The result would have been different prior to the Revision. See PR 3-105. 6. M delivered a writing to P in which M promised to pay, on demand, to P’s order, $1000 plus 10% per annum, provided, however, that “if M should default on payment, interest shall thereafter be calculated at 12% per annum. P is a holder in due course of the writing. True. Although it is unclear whether and when M will default, and thus the ultimate amount due on the note cannot currently be calculated with certainty, the “fixed amount” requirement applies only to principal and the uncertainty exists with respect to the
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amount of interest due. Even prior to the revision, the sum stated on an instrument remains “certain” for purposes of negotiability even if the instrument provides for different rates of interest before and after the default. See PR 3-106 (1)(b). 7.
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Negotiable Instruments Practice T-F questions Leibson -...

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