Smartbook assignment chapter 28

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West Texas A&M University *

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4371

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Law

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Apr 3, 2024

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docx

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12

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Smartbook – Chapter 28 Due 02/23/2023 Uniform Commercial Code (UCC) Section 3-401(a) imposes liability if the party or the party's agent ______ the negotiable instrument. - Signs According to the Uniform Commercial Code (UCC), a ______ can be any name, word, mark, or symbol used by a party to authenticate a writing. - Signature A(n) ______ is a person who promises to pay a set sum to the holder of a promissory note or certificate of deposit. - Maker Regarding negotiable instruments a(n) ______ is the person who is responsible for paying the money when it is requested. - Acceptor A(n) ______ is a person who orders the drawee to pay the instrument. - Drawer Which section of the Uniform Commercial Code (UCC) imposes liability if the party or the party's agent signs the negotiable instrument? - 3-401(a) In the context of negotiable instruments, which of the following statements is true of the endorser? - The endorser signs an instrument to restrict payment. - An endorser is one who issues an endorsement, an endorser is a person who signs an instrument to restrict payment of it, negotiate it, or incur liability. - Drawers and endorsers are secondary liable parties. According to the Uniform Commercial Code (UCC), a signature can be any name, word, mark, or symbol used by a party to______ a writing - Authenticate A party who is ______ liable for an instrument must pay without resorting to any other party. - Primarily Which of the following parties promises to pay a set sum to the holder of a promissory note or certificate of deposit? - Maker
The maker of a negotiable instrument is the party who: ______ - Promises to pay Which of the following parties agrees to pay the draft when it is presented for payment? - Acceptor According to Uniform Commercial Code (UCC) Section 3-413, a party who accepts a draft by signing on the face of the draft is _____ liable. - Primarily A drawer is a person who orders the _____ to pay the instrument - Drawee A party who is secondarily liable for an instrument must pay the amount on the instrument if the primarily liable party: - Defaults A(n) ______ is a person who signs an instrument to restrict payment of it, negotiate it, or incur liability. - Endorser What is the liability of an endorser for payment of an instrument? - Secondary Which of the following terms refers to a party's obligation to pay the instrument without resorting to any other party? - Primary liability Which of the following is a person who signs as a party ordering payment? - Drawer Which of the following parties is primarily liable for the amount of the promissory note because the party has promised to pay the amount of the instrument? - Maker The Uniform Commercial Code (UCC) defines _______ as making a demand for the drawee to pay. - Presentment Under Uniform Commercial Code (UCC) Section 3-413(a), the ______ is the party that signs the draft to agree to pay it when it is presented and is primarily responsible for the payment of the draft. - Acceptor
Which of the following is not a condition that must be met for a drawer or endorser to become liable? - The holder of the instrument must establish that he or she is a holder in due course. (in order for a drawer or endorser to become liable, the holder of the instrument was present the instrument in a proper and timely fashion. The instrument must be dishonored. Notice of the dishonor must be given to the drawer. ______ and endorsers are secondarily liable parties. - Drawers Uniform Commercial Code (UCC) Section 3-415(e) indicates that to hold an endorser secondarily liable, a holder must present a check within______ days of the endorsement. - 30 Which of the following is not a reason an endorser would sign an instrument? - To establish the fair market value of the instrument. (Reasons an endorser WOULD sign an instrument, to negotiate the instrument, to incur liability of the instrument, and to restrict payment of the instrument.) When a holder presents an instrument within a timely and proper manner but acceptance or payment is refused, the instrument has been: - Dishonored The drawer is the person who: - Signs as a party ordering payment Which of the following is not recognized as a commercially reasonable method of communication regarding notice of dishonor? - Implied (oral, electronic, and written are commercially reasonable methods of communication regarding notice of dishonor) The Uniform Commercial Code (UCC) defines ________ as making a demand for a drawee to pay. - Presentment Which of the following terms refers to a party who signs an instrument to provide credit for another party who has also signed the instrument? - Accommodation Which of the following is a condition that must be met for a drawer or endorser to become liable on an instrument?
- The holder of the instrument must present the instrument in a proper and timely fashion. As which kind of party can an accommodation party sign a negotiable instrument? (Check all that apply.) - Endorser - Maker - Makers, drawers, acceptors, or endorsers. - More frequently sign as makers or endorsers. Uniform Commercial Code (UCC) Section 3-414(f) indicates that a check must be presented within ____ days of its date to hold the drawer secondarily liable. - 30 According to Uniform Commercial Code (UCC) Section 3-401, the authorized _____ cannot be liable if she did not sign her own name on the instrument. - Agent Regarding presentment of a negotiable instrument, the term "dishonor" refers to a situation in which: - a holder presents an instrument within a timely and proper manner but acceptance or payment is refused Generally, if a signature to a negotiable instrument is unauthorized, this unauthorized signature will not impose liability to the named party. This rule applies to _____agents. - Unauthorized If the party that dishonors an instrument is a(n) ______ bank, it must give notice of dishonor before midnight of the next day. - Collection What is the legal effect of the principal's ratification of the unauthorized agent's signature? - The principal is liable for the instrument, while the agent is not. A(n) ______ signs an instrument to provide credit for another party who has also signed the instrument. - Accommodation party If the drawer or maker issues an instrument to a person who, posing as the payee, endorses the instrument, the signature is effective as the payee of the instrument and the issuing party is liable under the ______ rule. - Imposter
As an endorser, an accommodation party has ______liability - Secondary If the party whose signature was forged behaved so negligently as to “substantially contribute to . . . the making of a forged signature,” the party may be precluded from escaping liability under Uniform Commercial Code (UCC) Section: - 3-406 If the holder of the instrument is not a holder in due course, the agent can usually escape liability by demonstrating that it was not the intent of the______ to hold the agent personally responsible. - Principal Section 3-404(a) of the Uniform Commercial Code (UCC) creates the ______rule. - Imposter Generally, if a signature to a negotiable instrument is______, it will not impose liability on the named party. - Unauthorized. In a fictitious payee scenario the company is: _________. - Liable for the checks Which of the following terms refers to the principal's decision to approve of the unauthorized agent's signature? - Ratification Which of the following is a type of warranty, the breach of which may cause a party to be liable for an instrument? - Presentment Regarding the enforceability of unauthorized signatures, which of the following rules applies if a party fails to exercise ordinary care, observing reasonable commercial standards? - Negligence rule Transfer warranties always apply to the: - Transferee Under Uniform Commercial Code Section 3-406, a party is held liable for an unauthorized signature under - Negligence rule
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