Negotiable Instruments (Law)

Which of the following negotiable instruments CANNOT be drawn on copies?

• Draft

• Promissory note

• Check

• Bill of exchange

Which of the following is NOT a function of negotiable instruments?

• Credit device

• Substitute for money

• Recordkeeping device

• Conditional contract replacement

Which of the following is NOT a requirement for negotiability?

• Must be signed

• Must contain a condition to payment

• Must be for an exact amount of money

• Must be written

Which of the following is a written promise made by one person to pay a fixed sum to another person on demand or at a specific time in the future?

• Promissory note

• Check

• Draft

• Bill of exchange

How many parties are normally involved when using a check?

• 2

• 3

• 4

• 5

Which of the following types of discharge involves the holder of an instrument at or after its maturity absolutely and unconditionally renouncing in writing and giving up their right against all the parties to the instrument?

• By cancellation

• By material alteration

• By express waiver

• By payment in due course

Which of the following refers to the termination of the instrument and liability of the parties?

• Discharge

• Endorsement

• Defense

• Negotiation

Which of the following is an example of a real defense?

• Failure of a condition

• Prior payment

• Unauthorized completion

• Void contract

Which of the following is the act of a person who is the holder of a negotiable instrument signing his or her name on the instrument, thereby transferring title or ownership?

• Defense

• Endorsement

• Discharge

• Bearer

Which of the following is NOT an example of material alteration?

• Editing the name of the payee

• Altering the amount listed on the check

• Tearing a check out of a check book

• Changing the date on a check