1. Under Article 3, a check is different from a promissory note in that __________ . a. none of the answer choices are correct. b. Two parties are required on a check (issuer and payee); three parties are required on a promissory note. c. there is no difference between a check an promissory note under Article 3. Both function the same way. d. Three parties are required on a check; only two parties are required on a promissory note.

2. Uncle wants to help nephew - a college junior - attend upcoming summer classes. Uncle gave nephew a promissory note stating uncle will pay nephew $2,000 plus interest by May 31st of 2023. The note is signed by uncle and dated. Is this note negotiable under UCC Article 3?

a. No. It does not meet all 6 requirements of negotiability.

b. It depends on the term of the note (that is, the date the note was created).

c. It depends on whether nephew decides to attend summer classes. If he does not attend, then the note is non-negotiable, and likely uncle will cancel it.

d. Yes. It meets all 6 requirements of negotiability.

3. With regard to a paper check, a(n) __________ is the party who executes the order to transfer money as directed by the

account holder.

a. drawer

b. indorser

c. holder

d. drawee

4. Employer paid employee for earned wages using a paper check. The employer is the ________ on this paycheck. a. issuer b. drawee c. indorser (signor) d. payee

5. One of the two main purposes of UCC Article 3 allows merchants and consumers to ____________

a. encourage honesty in fact in commercial contracts

b. require all sales be paid in cash, not financed

c. require good faith and fair dealing in all sales contracts and loan agreements

d. use paper as a substitute for money

6. According to the professor's print lecture, the Uniform Commercial Code serves which purpose or purposes? a. make transactions happen b. protect buyers c. all the answer choices are correct. d. protect sellers

7. Employer paid employee for wages earned by paper check on drawn on company's bank account. Under Article 3, this bank is the classified as the __________ on this check.

a. drawee

b. payee

c. issuer

d. drawer

8. Merchant bought sports equipment from manufacturer, paying with a promissory note. Manufacturer then sold the note to its bank. Merchant/buyer then refused to pay the note because of defects in the equipment (contract breach by manufacturer/seller for delivering non-conforming goods). Manufacturer/seller filed for bankruptcy. Based on Article 3, can bank collect on the note from the note issuer, the merchant/buyer? (Hint: holder versus holder in due course).

a. no because manufacturer committed fraud by selling defective equipment

b. yes, but only if the manufacturer withdraws its bankruptcy filing

c. yes because bank is a holder in due course who gave value for the note

d. no because the bank is only a holder and cannot get more rights in the note.

9. Which statement below is NOT a characteristic or requirement to create a negotiable instrument?

a. the instrument must represent a commercially reasonable transaction (as determined by market value).

b. none of the answer choices are correct

c. the instrument can be based on a requirement that a specific condition be met before payment is due

d. the instrument can both written or oral

10. What must happen for an employee's paycheck to become a negotiable instrument? a. the check must contain a statement that it is intended for use by payee as a negotiable instrument b. the instrument becomes negotiable the instant the employee/payee takes possession of the check c. the employer/issuer must not prohibit the check's use as a negotiable instrument d. the employee/payee must indorse the check and transfer it to another person/holder