Tj_comp 20_tb_ch30

TJ_Comp 20_TB_Ch30
Download Document
Showing pages : 1 - 3 of 7
This preview has blurred sections. Sign up to view the full version! View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 30LIABILITY OF THE PARTIES UNDER NEGOTIABLE INSTRU- MENTS TRUE/FALSE 1. Any holder has all the rights relating to an instrument. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. An ordinary holder who is not a holder in due course can enforce the instrument in court unless the de- fendant proves a defense. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. The law gives certain holders of a negotiable instrument a preferred standing by protecting them from all defenses when they sue to collect payment. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 4. To have the status of a holder in due course, a person must first be a holder. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 5. A person who buys an overdue instrument cannot be a holder in due course. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. Bad faith is established by proof that the transferee had knowledge of such facts as rendered it improp- er to acquire the instrument under the circumstances. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 7. Although courts do not measure the value given, bad faith sometimes may be indicated by the small value given. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 8. Instruments may not be negotiated if they have been dishonored by non-acceptance. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 9. A holder of a negotiable instrument cannot be a holder in due course when the holder learns of a de- fense to payment after the acquisition of the instrument. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 10. In general, a holder who has knowledge of the facts as would put a reasonable person on inquiry is deemed to have knowledge of the facts that would be learned if such inquiry were made. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 11. A person who buys a note from a holder in due course knowing that the maker has a defense will not be a holder through a holder in due course. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 12. A holder through a holder in due course is subject to all defenses. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 13. A holder who is neither a holder in due course nor a holder through a holder in due course is subject to every defense, just as though the instrument were not negotiable. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 14. A limited defense will not defeat a holder in due course but will defeat an ordinary holder. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 15. There are more universal defenses than limited defenses. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 16. A holder having the rights of a holder in due course is subject to the defense of fraud in the induce- ment. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 17. Unless a person making payment on a negotiable instrument demands its return, the holder of the pa- per can continue to negotiate it....
View Full Document