UCC Article 3

Question 1

Ollie negotiates an order instrument to Phil by

a. assignment of its rights under a contract.
b. delivery with any necessary indorsement.
c. making an unconditional promise to pay.
d. presenting it in response to a demand by B.

Answer 1

b. delivery with any necessary indorsement.

Question 119

Under the Negotiable Instruments Article of the UCC, an instrument will be precluded from being negotiable if the instrument is ?

Answer 119

made subject to another agreement.

Question 120

___ occurs when the primary party refuses to pay the instrument

Answer 120

dishonor

Question 121

A transferee to be a holder must have ___ ___ of order paper, and the paper must be ___ ___ ___ ___ before the holder can be a holder in due course.

Answer 121

physical possession;

endorsed by the transferor

Question 122

What is the legal effect of a qualified indorsement?

Answer 122

1. Disclaims contract signature liability;
2. Still extends transfer warranties to all subsequent holders.