Ch 18

Question 1

signed writing that contains an unconditional promise or order to pay an exact sum on demand or at a specified future time to a specific person or order, or to bearer

Answer 1

negotiable instrument

Question 2

any instrument drawn on a drawee that orders the drawee to pay a certain amount of funds, usually to a third party on demand or at a definite future time

Answer 2

draft

Question 3

draft drawn by a drawer ordering the drawee bank or financial institution to pay a certain amount of funds to the payee on demand

Answer 3

check

Question 4

written promise made by one person to pay a fixed amount of funds to another person on demand or on a specified date

Answer 4

promissory note

Question 5

holder who acquires a negotiable instrument for value, in good faith, and without notice that the instrument is defective

Answer 5

holder in due course