How would the instrument be negotiated

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Reference no: EM132183448

1. Assume that the promissory note from Vexnet to Onyx Advertising was payable on a date certain (and all other requirements were met) so that it was a valid negotiable instrument. How would the instrument be negotiated?

Since it is an order instrument, it is negotiated by delivery only.

Since it is a bearer instrument, it is negotiated by delivery and indorsement.

Since it is a bearer instrument, it is negotiated by delivery only.

Since it is an order instrument, it is negotiated by delivery and indorsement.

2. Assume that the promissory note from Vexnet to Onyx Advertising was payable on a date certain (and all other requirements were met) so that it was a valid negotiable instrument. Onyx negotiates it to the bank and Ray indorses it by signing “Onyx Advertising” on the back of the note. Which of the following is true?

The indorsement is a blank indorsement, and the note is now an order instrument.

The indorsement is a special indorsement, and the note is now an order instrument.

The indorsement is a special indorsement, and the note is now a bearer instrument.

The indorsement is a blank indorsement, and the note is now a bearer instrument.

3. Assume that the promissory note from Vexnet to Onyx Advertising was payable on a date certain (and all other requirements were met) so that it was a valid negotiable instrument. Onyx negotiates it to the bank and Ray indorses it by signing “Onyx Advertising, without recourse” on the back of the note. Which of the following is true?

The indorsement is a qualified indorsement and, if the instrument is not paid, the bank cannot hold Onyx liable for the payment.

The indorsement is a qualified indorsement and, if the instrument is not paid, the bank can hold Onyx liable for the payment.

The indorsement is a special indorsement and, if the instrument is not paid, the bank can hold Onyx liable for the payment.

The indorsement is a special indorsement and, if the instrument is not paid, the bank cannot hold Onyx liable for the payment.

4. Assume that the promissory note from Vexnet to Onyx Advertising was payable on a date certain (and all other requirements were met) so that it was a valid negotiable instrument. If Vexnet misspelled Onyx on the instrument, instead writing “Oynx”, then what would be true?

The instrument may be indorsed with the incorrect spelling (Oynx), the correct spelling (Onyx), or both.

The instrument would not be negotiable since the name is spelled incorrectly.

The instrument would have to be indorsed with the incorrect spelling (Oynx).

The instrument would have to be indorsed with the correct spelling (Onyx).

5. Assume that the promissory note from Vexnet to Onyx Advertising was payable on a date certain (and all other requirements were met) so that it was a valid negotiable instrument. In which of the following situations would the person who becomes the holder of the note become a holder in due course?

Onyx gifts the note to Ray’s son for his twentieth birthday.

Vexnet dishonors the note when it is payable, but - knowing it was dishonored - the bank accepts it anyway.

Onyx negotiates the note to the bank two weeks after the due date for payment.

None of these.

Reference no: EM132183448

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