Understanding Business and Personal Law
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Chapter 25: Transferring Negotiable Instruments
      
  1."For deposit only" is an example of a qualified indorsement.  
  a.   TRUE  
  b.   FALSE  
      
  2.An assignment is  
  a.   a restrictive indorsement that allows for the transfer of an instrument from one party to another.  
  b.   a negotiable instrument payable to the order of the person holding it.  
  c.   the transfer of an agreement in such a way that the transferee becomes a holder.  
  d.   the transfer of your rights under a contract to someone else.  
      
  3.A blank indorsement  
  a.   require the words "without recourse" on the back of the check.  
  b.   requires the words "with recourse" on the back of the check.  
  c.   consists of the signature alone on the instrument.  
  d.   requires the words "pay to the order of" on the back of a check.  
      
  4.When your name is misspelled on an instrument, it becomes non-negotiable.  
  a.   TRUE  
  b.   FALSE  
      
  5.To encourage people to accept negotiable instruments from others, a system of implied warranties is part of the law of negotiable instruments.  
  a.   TRUE  
  b.   FALSE  
      
  6.When an instrument is properly negotiated, the one who receives it can legally collect payment on it.  
  a.   TRUE  
  b.   FALSE  
      
  7.Bearer paper may be negotiated by  
  a.   delivery alone.  
  b.   placing one's signature on the back.  
  c.   the drawer transferring it to the payee.  
  d.   the payee indorsing it.  
      
  8.Order paper may be negotiated by  
  a.   delivery alone.  
  b.   placing one's signature on the back.  
  c.   the drawer transferring it to the payee.  
  d.   assigning it to a payee.  
      
  9.The person who writes the indorsement is called the indorsee.  
  a.   TRUE  
  b.   FALSE  
      
  10.Anyone who pays an instrument on which there is a forged indorsement  
  a.   receives consideration for the instrument.  
  b.   must issue a stop-payment order.  
  c.   acquires title but is not a holder.  
  d.   is liable to the true owner for the amount of the instrument.  

 
 
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