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Kelly Signs An Instrument In Favor Of Leo

Customer Question

Kelly signs an instrument in favor of Leo that states it is "subject to a certain agreement between Kelly and Mona." This instrument is
Choose one answer.
a. negotiable.
b. nonnegotiable, because it is made subject to a separate agreement.
c. nonnegotiable, because it refers to a separate agreement.
d. nonnegotiable, because Kelly and Mona are not the same persons.

Ollie negotiates an order instrument to Phil by
Choose one answer.
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.

On May 1, Doug signs a check that is payable to the order of Extra Credit Corporation and that is dated July 1. This check is
Choose one answer.
a. negotiable.
b. nonnegotiable, because it is payable to Extra Credit Corporation.
c. nonnegotiable, because it is postdated.
d. nonnegotiable, because it is signed by Doug.

Fact Pattern 24-2

Jake is the maker of a $2,000 promissory note payable to Kim. Kim indorses the note to Lou who, in turn, indorses it to Mona, who then indorses it to Nat, the present holder.
Refer to Fact Pattern 24-2. Suppose that Mona pays Nat on the note. With timely notice to the proper parties, Mona may collect payment on the note from
Choose one answer.
a. Jake, Kim, or Lou.
b. Jake or Kim only.
c. Lou only.
d. no one.

At 1 a.m., on the sidewalk in front of Ace Credit Corporation, which is closed, Ben buys a $500 promissory note for $50 from Curt. When presented with Bens demand for payment, Dian, the maker of the note, could successfully claim that Ben
Choose one answer.
a. acquired the note with notice that it was overdue.
b. did not acquire the instrument in good faith.
c. did not give value for the instrument.
d. none of the choices.

Biff signs a note "payable to the order of County Credit Union." Unless Biff has a valid defense against payment, Biffs liability on this note is
Choose one answer.
a. lateral.
b. primary.
c. secondary.
d. tertiary.

Carlos gets a $100 check as a gift from Dona. Carlos crudely increases the amount of the check to $9,000 and transfers it to Especial Motors, Inc., in exchange for a car. Especial deposits the check in its bank account at First Place Bank. HDCs of this check include
Choose one answer.
a. Carlos.
b. Especial Motors.
c. First Place Bank.
d. none of these parties.

Don writes a check to Eve drawn on Dons account at First Town Bank. Eve presents the check for payment to the bank, which accepts the check. The bank is
Choose one answer.
a. not liable for payment.
b. primarily liable for payment.
c. secondarily liable for payment.
d. simultaneously liable for payment.

First Credit Corporation (FCC) has notice that a promissory note is overdue if the note is a demand instrument and FCC takes it
Choose one answer.
a. an unreasonable time after its due date.
b. any time after its due date.
c. on its due date.
d. any of the choices.

GR8 Products, Inc., warrants its goods to be free of defects. If Heck issues an instrument to obtain goods from GR8 that prove defective, Heck can avoid paying on the instrument
Choose one answer.
a. only if it is a check.
b. only if it is a note.
c. whether it is a check or a note.
d. under no circumstances.

Jen makes a gift of a check to Kilroy who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Kilroy is
Choose one answer.
a. an extraordinary holder in due course.
b. an ordinary check passer.
c. an ordinary holder.
d. an ordinary holder in due course.

Submitted: 2 years ago.
Category: Business and Finance Homework
Expert:  FiveStarLaw replied 2 years ago.

Welcome to JustAnswer.

Here are my answers for comparison with your own:

Kelly signs an instrument in favor of Leo that states it is "subject to a certain agreement between Kelly and Mona." This instrument is
Choose one answer.
b. nonnegotiable, because it is made subject to a separate agreement.

Ollie negotiates an order instrument to Phil by
Choose one answer.
b. delivery with any necessary indorsement.

On May 1, Doug signs a check that is payable to the order of Extra Credit Corporation and that is dated July 1. This check is
Choose one answer
c. nonnegotiable, because it is postdated.

Fact Pattern 24-2

Jake is the maker of a $2,000 promissory note payable to Kim. Kim indorses the note to Lou who, in turn, indorses it to Mona, who then indorses it to Nat, the present holder.
Refer to Fact Pattern 24-2. Suppose that Mona pays Nat on the note. With timely notice to the proper parties, Mona may collect payment on the note from
Choose one answer.
a. Jake, Kim, or Lou.

At 1 a.m., on the sidewalk in front of Ace Credit Corporation, which is closed, Ben buys a $500 promissory note for $50 from Curt. When presented with Bens demand for payment, Dian, the maker of the note, could successfully claim that Ben
Choose one answer.
b. did not acquire the instrument in good faith.

Biff signs a note "payable to the order of County Credit Union." Unless Biff has a valid defense against payment, Biffs liability on this note is
Choose one answer.
b. primary.

Carlos gets a $100 check as a gift from Dona. Carlos crudely increases the amount of the check to $9,000 and transfers it to Especial Motors, Inc., in exchange for a car. Especial deposits the check in its bank account at First Place Bank. HDCs of this check include
Choose one answer.
d. none of these parties.

Don writes a check to Eve drawn on Dons account at First Town Bank. Eve presents the check for payment to the bank, which accepts the check. The bank is
Choose one answer.
c. secondarily liable for payment.

First Credit Corporation (FCC) has notice that a promissory note is overdue if the note is a demand instrument and FCC takes it
Choose one answer.
d. any of the choices.

GR8 Products, Inc., warrants its goods to be free of defects. If Heck issues an instrument to obtain goods from GR8 that prove defective, Heck can avoid paying on the instrument
Choose one answer.
c. whether it is a check or a note.

Jen makes a gift of a check to Kilroy who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Kilroy is
Choose one answer.
c. an ordinary holder.

If you have any further questions, I am happy to assist you. You can start your new question with "for WebLaw" and send it to the appropriate legal, tax or homework category so that the question is directed to me and I can give your question my immediate attention.

Thank you very much,

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