Commercial Paper

Question 1

Under Article 3 of the Uniform Commercial Code, as adopted by Virginia, what is the statute of limitations for actions on notes payable at a definite time or on demand?

Answer 1

Six years.

Question 2

Under Article 3 of the UCC, as adopted by VA, to be negotiable, an instrument must be payable to whom?

Answer 2

To order or bearer.

Question 3

What are the kinds of negotiable instruments to which Article 3 of the UCC as adopted by VA applies?

Answer 3

Notes and drafts.

Question 4

True or False: Under Article 3 of the UCC, as adopted by VA, a check is a specific type of note.

Answer 4

FALSE. A check is a type of draft.

Question 5

Of the following defenses—infancy, illegality, duress, and lack of consideration–all may be raised against a holder in due course except:

Answer 5

Lack of consideration.

Question 6

Under Article 3 of the UCC, if no demand for payment is made on the maker of a note payable on demand or at a definite time, an action to enforce the note is barred if no interest or principal has been paid on the note for ________ years.

Answer 6

10 years.

Question 7

Of the following defenses–discharge in insolvency proceedings, failure of a condition precedent, breach of warranty, and lack of consideration–which can be raised against a holder in due course?

Answer 7

Discharge in insolvency proceedings.

Question 8

Under the UCC, which type of fraud is assertable against a holder in due course?

Answer 8

Real fraud.