Mod 28 Wrong Answers Flashcards
3 parties in draft
1 Drawer
2 drawee
3 payee
A draft is a three party instrument where a drawer…
Orders a drawee (bank) to pay a fixed amount in money to the
Payee
A draft is not…
Payable on demand (a check is payable on demand)
Blank endorsement 2
1 does not specify any endorsee
2 converts order paper to bearer paper
Special endorsement
Indicates the specific person to whom the endorsee wishes to negotiate the instrument
Use of a special endorsement converts…
The order paper into bearer paper
What kind of endorsement does not specify any endorsee?
Blank endorsement
An endorsement that indicates a specific person to whom the instrument is being negotiated is…
A special endorsement
Qualified endorsement
Disclaims liability by signing recourse
In order for an instrument to qualify as a check, the instrument must…
Be payable on demand
A special endorsement states…
“Pay to name”
“If he completes” is a phrase found in…
Found in a restrictive endorsement
A party who found an instrument payable to bearer is…
2) but not…
a holder
2) but not a holder in due course
To be a holder in due course he must…
Obtain a negotiable instrument from a holder in due course
When a negotiable instrument is found, it cannot be established that the…
Previous holder was a holder in due course
