UCC Article 3

Question 0

What are the requirements to be a negotiable instrument?

Answer 0

Must be in writing

Must be signed by maker or drawer

Must contain an unconditional promise or order to pay

Amount must be a sum certain (fixed) payable in money

Must be payable on demand or at a definite time

Must be payable to order or bearer

Question 1

What are the types of negotiable instruments?

Answer 1

Orders to pay (eg, checks and drafts) and promises to pay (eg, notes and certificates of deposit)

Question 2

What are the four different types of indorsement?

Answer 2

Blank, special, qualified, and restrictive.

Question 3

List the three types of restrictive indorsements.

Answer 3

Conditional (payment is conditional on an event occurring)

Prohibitive (purports to prohibit further transfer)

For deposit or collection

Question 4

What is a holder?

Answer 4

Someone who is in possession (holds) a negotiable instrument that is made payable to him or her, the bearer, or is negotiated to him or her.