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Business_Law_Test 3

Business_Law_Test 3 - Chapters 28-31 test Name True/False...

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Chapters 28-31 test Name True/False Indicate whether the statement is true or false. __F__ 1. Instruments always are negotiable. __T__ 2. In a negotiable instrument, the promise or order to pay must be unconditional. __F__ 3. An instrument that originally was bearer paper always remains bearer paper. __T__ 4. The order or bearer character of a paper is determined as of the time when the negotiation is about to take place. __F__ 5. If an instrument bears a restrictive endorsement, any further transfer or negotiation is effectively barred. __T__ 6. A forged endorsement is not effective to negotiate commercial paper unless the impostor rule applies. __T__ 7. The impostor rule applies without regard to whether the drawee acted with reasonable care. __T__ 8. A holder of a negotiable instrument cannot be a holder in due course when the holder learns of a defense to payment after the acquisition of the instrument. __T__ 9. An order to stop payment of a check may be asserted as a defense by the drawer of the check against a holder in due course. __F__ 10. When a bank certifies a check, the amount involved in the certification will be retained in the depositor's account until payment of the certified check. __F__ 11. A bank may provide detailed information on the accounts of its customer on the request of a reputable business or a law enforcement agency without the consent of its customer. __F__ 12. A bank is required to pay a check presented more than six months after its date. __T__ 13. A buyer may stop payment on a certified check issued to a seller if the goods are defective when received. __T__ 14. Although a drawer has stopped payment on a check, the drawer still may be held liable on the check unless the drawer has a defense that will defeat the holder in a lawsuit. __F__ 15. If a bank improperly refuses to make payment of checks for which its customer has sufficient funds on deposit, it is liable to the drawer for damages sustained by the drawer in consequence of such dishonor. Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 16. If a check is made payable to Paolo, and Paolo signs on the back of the check, Paolo is: a. the payee and the indorser. b. the drawee and the indorser. c. the payee and the endorsee. d. only the indorser.
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