FOR THE FOLLOWING QUESTIONS, INDICATE WHETHER THE ANSWER IS TRUE OR FALSE. 1. "Personal" defenses to liability on a negotiable instrument include lack of consideration, failure of consideration, breach of contract, mistake, misrepresentation, breach of express or implied warranties of merchantability and/or fitness for a particular purpose. 2. The Electronic Fund Transfer Act of 1978, is mainly concerned with the privacy rights between banks, its customers and third parties 3. A statement in a negotiable instrument that payment can only be made out of a particular fund or source renders it non-negotiable. 4. An agent is not personally liable on a negotiable instrument if he is authorized to sign and does so in his agent capacity. 5. If a negotiable instrument is not paid by the party expected to pay and the conditions precedent to the liability of a secondary party are satisfied, the secondary party is liable unless he has disclaimed liability or possesses a valid defense to the instrument 6. A person who accepts a negotiable instrument that has been completed without knowing that it was incomplete when issued, can take it as an "HDC". 7. When a bank draws a check on itself, the negotiable instrument is called a cashiers check or teller's check. 8. When a series of forgeries by the same wrongdoer occurs, the UCC provides that the customer, to recover for all forged items, must have discovered and reported the first forged check to the bank within sixty calendar days from receipt of his bank statement. 9. Warranty liability is subject to the conditions of proper presentment, dishonor and notice of dishonor. 10. A person whose name is forged on a negotiable instrument is liable to pay only a holder in due course the value of the forged instrument. 11. If an ATM fails to operate properly due to electrical failure, one of the defenses a commercial impracticability. 12. A person may be liable on the basis of warranty liability even though he or she never signs the negotiable instrument. 13. A remotely created check or pre-authorized draft requires the payor bank to confirm the authenticity of the customer who directed that payment be made. 14. Electronic fund transfers by consumers are governed by the UCC 15. A traveler's check may be distinguished from a cashier's check by the fact that a traveler's check is not normally an acknowledgment of a debt drawn by the issuing institution on itself. 16. Although banks are usually not under an obligation to certify checks, the bank that does certify a check will be considered an acceptor but will not be primarily liable. 17. If PUG Corp. gives value for a negotiable instrument pursuant to its purchase of all of the assets of Shepard Corp., then PUG Corp. will acquire the status of a holder in due course. 18. Assume that Jane gives a check to Craig in exchange for his promise to marry her cousin Mary, but Craig subsequently marries another woman and refuses to return the check. If Jane puts a "stop payment order on the check before Craig negotiates the instrument to Sam who acquires the check as a holder in due course, Jane may dishonor the check 19. Suppose that Joe executes a promissory note on behalf of his partnership, Bruce Associates in favor of Phil. If Phil later endorses the note to Sally who then endorses it to Martha, then Martha will be entitled to present the note to Joe or any of the other partners. 20. Assume that Alan writes a check to cover a S 300 payment to Jose, a landscaper who recently performed gardening work but Alan fails to fill in the amount of the check. If Jose decides that his work was actually worth $ 500 and alters the check accordingly before cashing it, then Alan will be able to compel his bank to re-credit his account for $ 200 even though the bank paid the item in good faith 21. Suppose that Henry impersonates a famous comedian and goes into a shop and convinces the merchant to issue a check to him in the name of the famous Sent on For Collection and pund, the merchant will be able 18 demand re-credit of his account on the ground of forgery. 22. Assume that David goes to an ATM at Apple Bank on January 15" but discovers his access card is missing and does not notify his bank until January 30%. If Bill, the thief who stole David's card, withdraws $200 from David's account on January 25, then Apple Bank will probably be required to pay the loss. 23. The first bank to receive a check for payment is the intermediary bank 24. If a mortgage note states that it is both secured by a mortgage and subject to the terms and conditions of the mortgage, then it will be deemed to be negotiable. 25. Assume that Harry fraudulently induces Joe to sign a promissory note for S 500. If Harry transfers the promissory note to Jack for valid consideration, then Jack will be able to collect the debt from Joe - despite the fraud because he was an innocent third party, 26. Suppose that Mike finds a negotiable instrument that says "payable to order of bearer" If Mike attempts to cash the instrument, his request will be not be honored by the drawee because it has no way of verifying whether he was the one to properly hold the instrument. 27. A US government check or draft must be presented for payment within six months from the date of issuance. 28. Order paper may be converted to bearer paper but bearer paper may not be converted to order paper. 29. The Statute of Limitations for warranty liability of a negotiable instrument is six years. 30. In the event of a conflict between numbers and words on a negotiable instrument, numbers control unless they are unclear or ambiguous. 31. In order to stop a pre authorized transfer under the EFT Act, the bank must be notified orally or in writing at least five days in advance. 32. The holder of a promissory note may extend time for payment indefinitely. 33. Any irregularity on the face of a negotiable instrument that calls into question its validity or terms of ownership or creates an ambiguity, will bar holder in due course status 34. A payee or endorsee whose name is mis spelled, can indorse with the mis-specs account when it pays on tored Suure because the customer is responsible for maintaining control over his checks. 38. Assume that Jeff signs a promissory note and indicates he is an agent but fails to identify Patrick as the principal. In such a case, both Jeff and the unnamed principal, Patrick, will be held personally liable for any obligations arising under the promissory note. 39. When there is no place of payment on the instrument, albeit a check or note, the instrument is non negotiable under Article 3 of the UCC 40. Unless the date of an instrument is necessary to determine a definite time for payment, the fact that an instrument is undated does not affect its negotiability. 41. A notation on a check that it is "non negotiable" or not governed by Article 3" has no effect on the checks negotiability. 42. Federal Trade Commission Rule 433 requires a statement in a consumer credit note to the effect that a holder or transferee of the note takes it free of whatever claims or defenses the consumer may have had or can assert against the original payee. 43. In accordance with Article 3 of the UCC, the negotiable instrument must be signed on its face and more specifically on its lower right side to be effective. 44. A promissory note secured by a mortgage is a "mortgage note" while a note secured by personal property is a "collateral note" 45. Once an instrument qualifies as a negotiable instrument, the form of endorsement will have no effect on the character of the underlying instrument. 46. Secondary contractual liability on a negotiable instrument is similar to that of a guarantor of a simple contract, except that a drawer is not secondarily liable but primarily liable on a cashier's check or any other draft on which the drawer is also the drawee. 47. If a draft or check is a payable at a bank or financial institution, improper presentment or notice will relieve the drawer from secondary contractual liability only when the drawee-bank or financial institution is insolvent. 48. Any necessary notice of dishonor must be given by a bank by midnight of the next banline.desenter receipt and notice by from payment, cancellation, reacquisition of the instrument or surrender of collateral without consent. NEGOTIABLE OR NON NEGOTIABLE For the following questions, please indicate if the writing is a negotiable instrument under Article 3 of the UCC. If non negotiable, why? What element or elements are missing? IN each question, John took out a piece of paper, wrote the following below and signed it. 1. I promise to pay $2,500 to Kim within thirty days. IS IT NEGOTIABLE? If not, element(s) missing 2. I promise to pay Sal's Pizza only. S 1,000 on 6-15-2020 IS IT NEGOTIABLE? If not, what element(s) missing: 3. I promise to pay Jose S 10,000 pesos and provide 10 hours of accounting work on 1-1-21 IS IT NEGOTIABLE? If not, what element(s) missing: 4. I promise to pay Ralph $ 500 no later than 10-1-21 provided he adheres to agreement IS IT NEGOTABLE? If not, what element(s) missing? 5. I promise to pay Jack the money I owe on or about 8-1-21 IS IT NEGOTIABLE? If not, what element(s) missing? 6. I owe Murah Beer Co. S 1,000 and should pay on 3-1-21 or 4-2-21 IS IT NEGOTIABLE? If not, what element(s) missing? 7. I promise to pay MN Corp. $75,000 on 7-3-21 and reserve right to extend payment time IS IT NEGOTIABLE? If not, what element(s) missing? 8. I promise to pay Omar S 5,000 on 1-1-21 or sooner upon receipt of my I accounting WORK ON 1-1-21 IS IT NEGOTIABLE? If not, what element(s) missing: 4. I promise to pay Ralph S 500 no later than 10-1-21 provided he adheres to agreement IS IT NEGOTABLE? If not, what element(s) missing? 5. I promise to pay Jack the money I owe on or about 8-1-21 IS IT NEGOTIABLE? IF not, what element(s) missing? 6. I owe Murah Beer Co. S 1,000 and should pay on 3-1-21 or 4-2-21 IS IT NEGOTIABLE? If not, what element(s) missing? 7. I promise to pay MN Corp. $75,000 on 7-3-21 and reserve right to extend payment time IS IT NEGOTIABLE? If not, what element(s) missing? 8. I promise to pay Omar $ 5,000 on 1-1-21 or sooner upon receipt of my inheritance IS IT NEGOTIABLE? If not, what element(s) missing? 9. Pay to the order of Rosie or bearer $ 750 on or about 11-15- IS IT NEGOTIABLE? missing? _If not, what clement(s) 10. Pay to the order of Harry S 400 on 2-15-21 and holder may extend time indefinitely IS IT NEGOTIABLE? If not, what element(s) missing? USING THE THREE FAMILIES OF ENDORSEMENTS, IDENTIFY ALL ENDORSEMENTS AND STATE THE LEGAL EFFECT OF EACH. FOR THE FOLLOWING QUESTIONS, INDICATE WHETHER THE ANSWER IS TRUE OR FALSE. 1. "Personal" defenses to liability on a negotiable instrument include lack of consideration, failure of consideration, breach of contract, mistake, misrepresentation, breach of express or implied warranties of merchantability and/or fitness for a particular purpose. 2. The Electronic Fund Transfer Act of 1978, is mainly concerned with the privacy rights between banks, its customers and third parties 3. A statement in a negotiable instrument that payment can only be made out of a particular fund or source renders it non-negotiable. 4. An agent is not personally liable on a negotiable instrument if he is authorized to sign and does so in his agent capacity. 5. If a negotiable instrument is not paid by the party expected to pay and the conditions precedent to the liability of a secondary party are satisfied, the secondary party is liable unless he has disclaimed liability or possesses a valid defense to the instrument 6. A person who accepts a negotiable instrument that has been completed without knowing that it was incomplete when issued, can take it as an "HDC". 7. When a bank draws a check on itself, the negotiable instrument is called a cashiers check or teller's check. 8. When a series of forgeries by the same wrongdoer occurs, the UCC provides that the customer, to recover for all forged items, must have discovered and reported the first forged check to the bank within sixty calendar days from receipt of his bank statement. 9. Warranty liability is subject to the conditions of proper presentment, dishonor and notice of dishonor. 10. A person whose name is forged on a negotiable instrument is liable to pay only a holder in due course the value of the forged instrument. 11. If an ATM fails to operate properly due to electrical failure, one of the defenses a commercial impracticability. 12. A person may be liable on the basis of warranty liability even though he or she never signs the negotiable instrument. 13. A remotely created check or pre-authorized draft requires the payor bank to confirm the authenticity of the customer who directed that payment be made. 14. Electronic fund transfers by consumers are governed by the UCC 15. A traveler's check may be distinguished from a cashier's check by the fact that a traveler's check is not normally an acknowledgment of a debt drawn by the issuing institution on itself. 16. Although banks are usually not under an obligation to certify checks, the bank that does certify a check will be considered an acceptor but will not be primarily liable. 17. If PUG Corp. gives value for a negotiable instrument pursuant to its purchase of all of the assets of Shepard Corp., then PUG Corp. will acquire the status of a holder in due course. 18. Assume that Jane gives a check to Craig in exchange for his promise to marry her cousin Mary, but Craig subsequently marries another woman and refuses to return the check. If Jane puts a "stop payment order on the check before Craig negotiates the instrument to Sam who acquires the check as a holder in due course, Jane may dishonor the check 19. Suppose that Joe executes a promissory note on behalf of his partnership, Bruce Associates in favor of Phil. If Phil later endorses the note to Sally who then endorses it to Martha, then Martha will be entitled to present the note to Joe or any of the other partners. 20. Assume that Alan writes a check to cover a S 300 payment to Jose, a landscaper who recently performed gardening work but Alan fails to fill in the amount of the check. If Jose decides that his work was actually worth $ 500 and alters the check accordingly before cashing it, then Alan will be able to compel his bank to re-credit his account for $ 200 even though the bank paid the item in good faith 21. Suppose that Henry impersonates a famous comedian and goes into a shop and convinces the merchant to issue a check to him in the name of the famous Sent on For Collection and pund, the merchant will be able 18 demand re-credit of his account on the ground of forgery. 22. Assume that David goes to an ATM at Apple Bank on January 15" but discovers his access card is missing and does not notify his bank until January 30%. If Bill, the thief who stole David's card, withdraws $200 from David's account on January 25, then Apple Bank will probably be required to pay the loss. 23. The first bank to receive a check for payment is the intermediary bank 24. If a mortgage note states that it is both secured by a mortgage and subject to the terms and conditions of the mortgage, then it will be deemed to be negotiable. 25. Assume that Harry fraudulently induces Joe to sign a promissory note for S 500. If Harry transfers the promissory note to Jack for valid consideration, then Jack will be able to collect the debt from Joe - despite the fraud because he was an innocent third party, 26. Suppose that Mike finds a negotiable instrument that says "payable to order of bearer" If Mike attempts to cash the instrument, his request will be not be honored by the drawee because it has no way of verifying whether he was the one to properly hold the instrument. 27. A US government check or draft must be presented for payment within six months from the date of issuance. 28. Order paper may be converted to bearer paper but bearer paper may not be converted to order paper. 29. The Statute of Limitations for warranty liability of a negotiable instrument is six years. 30. In the event of a conflict between numbers and words on a negotiable instrument, numbers control unless they are unclear or ambiguous. 31. In order to stop a pre authorized transfer under the EFT Act, the bank must be notified orally or in writing at least five days in advance. 32. The holder of a promissory note may extend time for payment indefinitely. 33. Any irregularity on the face of a negotiable instrument that calls into question its validity or terms of ownership or creates an ambiguity, will bar holder in due course status 34. A payee or endorsee whose name is mis spelled, can indorse with the mis-specs account when it pays on tored Suure because the customer is responsible for maintaining control over his checks. 38. Assume that Jeff signs a promissory note and indicates he is an agent but fails to identify Patrick as the principal. In such a case, both Jeff and the unnamed principal, Patrick, will be held personally liable for any obligations arising under the promissory note. 39. When there is no place of payment on the instrument, albeit a check or note, the instrument is non negotiable under Article 3 of the UCC 40. Unless the date of an instrument is necessary to determine a definite time for payment, the fact that an instrument is undated does not affect its negotiability. 41. A notation on a check that it is "non negotiable" or not governed by Article 3" has no effect on the checks negotiability. 42. Federal Trade Commission Rule 433 requires a statement in a consumer credit note to the effect that a holder or transferee of the note takes it free of whatever claims or defenses the consumer may have had or can assert against the original payee. 43. In accordance with Article 3 of the UCC, the negotiable instrument must be signed on its face and more specifically on its lower right side to be effective. 44. A promissory note secured by a mortgage is a "mortgage note" while a note secured by personal property is a "collateral note" 45. Once an instrument qualifies as a negotiable instrument, the form of endorsement will have no effect on the character of the underlying instrument. 46. Secondary contractual liability on a negotiable instrument is similar to that of a guarantor of a simple contract, except that a drawer is not secondarily liable but primarily liable on a cashier's check or any other draft on which the drawer is also the drawee. 47. If a draft or check is a payable at a bank or financial institution, improper presentment or notice will relieve the drawer from secondary contractual liability only when the drawee-bank or financial institution is insolvent. 48. Any necessary notice of dishonor must be given by a bank by midnight of the next banline.desenter receipt and notice by from payment, cancellation, reacquisition of the instrument or surrender of collateral without consent. NEGOTIABLE OR NON NEGOTIABLE For the following questions, please indicate if the writing is a negotiable instrument under Article 3 of the UCC. If non negotiable, why? What element or elements are missing? IN each question, John took out a piece of paper, wrote the following below and signed it. 1. I promise to pay $2,500 to Kim within thirty days. IS IT NEGOTIABLE? If not, element(s) missing 2. I promise to pay Sal's Pizza only. S 1,000 on 6-15-2020 IS IT NEGOTIABLE? If not, what element(s) missing: 3. I promise to pay Jose S 10,000 pesos and provide 10 hours of accounting work on 1-1-21 IS IT NEGOTIABLE? If not, what element(s) missing: 4. I promise to pay Ralph $ 500 no later than 10-1-21 provided he adheres to agreement IS IT NEGOTABLE? If not, what element(s) missing? 5. I promise to pay Jack the money I owe on or about 8-1-21 IS IT NEGOTIABLE? If not, what element(s) missing? 6. I owe Murah Beer Co. S 1,000 and should pay on 3-1-21 or 4-2-21 IS IT NEGOTIABLE? If not, what element(s) missing? 7. I promise to pay MN Corp. $75,000 on 7-3-21 and reserve right to extend payment time IS IT NEGOTIABLE? If not, what element(s) missing? 8. I promise to pay Omar S 5,000 on 1-1-21 or sooner upon receipt of my I accounting WORK ON 1-1-21 IS IT NEGOTIABLE? If not, what element(s) missing: 4. I promise to pay Ralph S 500 no later than 10-1-21 provided he adheres to agreement IS IT NEGOTABLE? If not, what element(s) missing? 5. I promise to pay Jack the money I owe on or about 8-1-21 IS IT NEGOTIABLE? IF not, what element(s) missing? 6. I owe Murah Beer Co. S 1,000 and should pay on 3-1-21 or 4-2-21 IS IT NEGOTIABLE? If not, what element(s) missing? 7. I promise to pay MN Corp. $75,000 on 7-3-21 and reserve right to extend payment time IS IT NEGOTIABLE? If not, what element(s) missing? 8. I promise to pay Omar $ 5,000 on 1-1-21 or sooner upon receipt of my inheritance IS IT NEGOTIABLE? If not, what element(s) missing? 9. Pay to the order of Rosie or bearer $ 750 on or about 11-15- IS IT NEGOTIABLE? missing? _If not, what clement(s) 10. Pay to the order of Harry S 400 on 2-15-21 and holder may extend time indefinitely IS IT NEGOTIABLE? If not, what element(s) missing? USING THE THREE FAMILIES OF ENDORSEMENTS, IDENTIFY ALL ENDORSEMENTS AND STATE THE LEGAL EFFECT OF EACH