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312541
312541
1. If you write a check to pay for your groceries, the check is:
a. a certified note.
b. a negotiable instrument.
c. a promise to pay.
d. a certificate of deposit.
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3. You write a check to pay for your haircut. In this transaction, who is the
drawee?
a. You are, because you drew up the check.
b. Your bank is, because it must pay the check.
c. The person who cuts your hair is, because the check is payable to that
person.
d. There is no drawee in this transaction.
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d. By no one.
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a. Correct. The party making the promise to pay must sign the CD.
b. Incorrect. The party who will receive payment does not need to sign
the CD for it to be negotiable.
c. Incorrect. The promisee is the party receiving the promise of payment,
and that person need not sign the CD for the CD to be negotiable.
d. Incorrect. The maker (the bank) must sign the CD.
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a. Incorrect. The drafters of the UCC were concerned with increasing the
utility of negotiable instruments as money substitutes or as credit
devices.
b. Incorrect. The drafters of the UCC were not trying to make fraud less
difficult.
c. Correct. The drafters of the UCC wanted to encourage the smooth flow
of commercial transactions, not hinder these transactions.
d. Incorrect. The drafters of the UCC did want to promote the use of the
instruments as credit devices but not in order to increase the
bankruptcy rates.
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