Banking and Negotiable Instruments - Chapter 10 BUSLAW

Holders in due course take instruments of value in good faith and without notice that the instrument is defective.

• True

• False

A negotiable instrument may be oral or written.

• True

• False

The most common type of negotiable instrument is the check.

• True

• False

A qualified indorsement limits the liability of the indorser.

• True

• False

The promise in a note or the order in a draft must be unconditional.

• True

• False

The Check 21 Act allows electronic processing to clear checks quickly and safely.

• True

• False

If your bank refuses to cash your check when sufficient funds are available, it would be a breach of the bank's contract.

• True

• False

Personal defenses, such as breach of contract, can be used against a holder in due course.

• True

• False

An order to a third party to pay money is called a:

• draft

• note

• certificate of deposit

• bill of lading

The person who writes a promissory note is called a(n):

• drawer

• maker

• payee

• acceptor