Negotiation

Question 1

Negotiation

Answer 1

Transfer of a negotiable instrument so transferee is a holder

Question 2

Holder Status

Answer 2

Possession of Negotiable Instrument AND Good title

Question 3

Good Title

Answer 3

Bearer- possession

Order- possession plus necessary indorsements

Question 4

Blank Indorsements

Answer 4

Payee’s signature only

Whoever in possession with signature can cash it

Question 5

Special Indorsements

Answer 5

Payee’s signature plus designation of new person to whom instrument payable

Creates Order Paper

Question 6

Indorsement for Deposit or Collection

Answer 6

Restrictive indorsement limiting what may be done with instrument

Question 7

Identification of person to whom instrument payable

Answer 7

Intent of issuer determines initial payee

Multiple payees- “and” requires all payees to indorse; “or” requires any one of payees

Question 8

Transferee’s right to Transferor’s Indorsement

Answer 8

If instrument transferred for value, transferee has specifically enforceable right to transferor’s indorsement

Question 9

Depository Bank becomes holder even w/o Transferee’s signature

Answer 9

Depository bank becomes a holder even if payee deposits check in payee’s account without indorsement

Question 10

Misspelled Payee’s Name

Answer 10

Payee may indorse with incorrect or real name

Question 11

Payee lacking capacity may effectively indorse

Answer 11

Negotiation is effective even if the payee was a minor, incompetent, unduly influenced, subject to duress