C241 Meeting Two Quizzes- Western Governors University
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BA C241
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Western Governors University
C241 Meeting Two Quizzes- Western Governors University/C241 Meeting Two Quizzes- Western Governors University/C241 Meeting Two Quizzes- Western Governors University
c241 meeting two quizzes western governors university
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BA C241
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Chapter 12 – The Function and Creation of Negotiable Instruments
Quiz Part II
CONTRACTS LEARNING OBJECTIVES
1. Analyze a case to determine whether a party is considered a holder in due course (HDC).
2. Analyze components of a sales or lease contract to determine potential benefits and risks in a
given scenario.
3. Analyze the defense and liability considerations involved in a given negotiable instrument case.
4. Apply the rules and regulations governing contracts as outlined in common law rules, the
Uniform Commercial Code, and Contracts for the International Sale of Goods in a given scenario
5. Describe warranties of title, express warranties, and implied warranties.
6. Evaluate an instrument to determine whether it meets the requirements for negotiability.
7. Explain the benefits and challenges of electronic banking.
8. Explain the legal effects of a given type of indorsement.
9. Explain the legal remedies for a breached contract.
10. Explain the purpose of the Uniform Commercial Code.
11. Explain the requirements for the formation of sales and lease contracts, including the offer,
acceptance, consideration, the statute of frauds, and parol evidence.
12. Identify banks’ duties and liabilities involving checks.
13. Identify the obligations of the parties involved in sales and lease contracts according to the UCC.
14. Identify types of negotiable instruments.
1. InterComp normally sells $50,000 worth of software to Power Source, a retail electronics store, each
summer on terms requiring payment in sixty days. One year, InterComp wants cash, but Power Source
wants the usual sixty days. To meet both needs, the parties can arrange
a. a certificate of deposit.
b. a bearer bond.
c. a trade acceptance.
d. an international letter of credit.
2. Sarah has a checking account at Secure Bank. Sarah buys her roommate Sophie’s two tickets to a
Broadway musical for $200. Sarah writes Sophie a check for the tickets. In this situation, Secure Bank is
a. the drawee.
b. the indorser.
c. the payee.
d. the drawer.
3. Evermore Bank is both the drawer and the drawee with regard to a draft issued to Fernando. The draft is
, a. a certificate of deposit.
b. a cashier’s check.
c. a nonnegotiable instrument.
d. a promissory note.
4. Willy deposits $5,000 with Home State Bank on July 1, 2012. Home State Bank promises to repay Willy
the $5,000 plus 3 percent annual interest on July 1, 2017. This is
a. a certificate of deposit.
b. a cashier’s check.
c. none of the choices.
d. a draft.
5. To borrow money to finance the start-up of his business, Rollo executes an instrument in favor of Security
Bank. For the instrument to be negotiable, the signature must be
a. anywhere on the instrument.
b. anywhere on the lower half of the instrument only.
c. in the lower left-hand corner of the instrument only.
d. in the lower right-hand corner of the instrument only.
6. Bart, the owner of Clear Cut Corporation, signs an instrument that includes the phrase “payment for this
note will be made from the proceeds of next year’s timber sale.” This instrument is
a. negotiable.
b. nonnegotiable, because payment can be made only out of a particular source.
c. nonnegotiable, because it states an express condition to payment.
d. nonnegotiable, because the reasons for the note are not clear on its face.
7. Brie wants one of Cari’s purebred Dalmations. Brie signs an instrument in which she promises to pay
Jasmine for a puppy. The instrument will be negotiable if it is payable in
a. goods of equal market value.
b. money.
c. any of the choices.
d. shares of stock.
8. Payday Loans, Inc., signs an instrument payable to the order of Qiana that states, “The maker of this note at
the date of maturity, April 1, 2016, can extend the time of payment, but for no more than a reasonable
time.” This instrument is
a. negotiable.
b. nonnegotiable, because it includes an extension clause.
c. nonnegotiable, because it is not payable within a definite time.
d. nonnegotiable, because it is payable to a specific payee.
9. To buy a stuffed cow, Ken executes a check “pay to Laura or bearer” and gives it to Laura, who does not
own a stuffed cow. This check is
a. negotiable.
b. nonnegotiable, because it does not indicate a specific payee.
c. nonnegotiable, because it may be a joke.
, d. nonnegotiable, because Laura does not own a stuffed cow.
10. Cricket signs a check payable to the order of Discount Warehouse, Inc., that does not include a date. This
check is
a. negotiable.
b. nonnegotiable, because it does not include a date.
c. nonnegotiable, because it is payable to a corporation.
d. nonnegotiable, because it is signed by the drawer.
Chapter 13 – Transferability and Holder in Due Course
Quiz II
CONTRACTS LEARNING OBJECTIVES
1. Analyze a case to determine whether a party is considered a holder in due course (HDC).
2. Analyze components of a sales or lease contract to determine potential benefits and risks in a
given scenario.
3. Analyze the defense and liability considerations involved in a given negotiable instrument case.
4. Apply the rules and regulations governing contracts as outlined in common law rules, the
Uniform Commercial Code, and Contracts for the International Sale of Goods in a given scenario
5. Describe warranties of title, express warranties, and implied warranties.
6. Evaluate an instrument to determine whether it meets the requirements for negotiability.
7. Explain the benefits and challenges of electronic banking.
8. Explain the legal effects of a given type of indorsement.
9. Explain the legal remedies for a breached contract.
10. Explain the purpose of the Uniform Commercial Code.
11. Explain the requirements for the formation of sales and lease contracts, including the offer,
acceptance, consideration, the statute of frauds, and parol evidence.
12. Identify banks’ duties and liabilities involving checks.
13. Identify the obligations of the parties involved in sales and lease contracts according to the UCC.
14. Identify types of negotiable instruments.
1. Edgar possesses a check that is “payable to cash.” Fawn steals the check and delivers it to Godfrey, an
innocent third person. All rights to the check are
a. Edgar’s.
b. Fawn’s.
c. Godfrey’s.
d. lost.
2. Roderick negotiates a bearer instrument to Shauna by
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