Reference no: EM132183455

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. Vexnet:

is the maker of the note, but by delivering it to Onyx has secondary liability.

is the maker of the note and has primary liability.

is the maker of the note, but by delivering it to Onyx has no liability.

is the acceptor of the note and has primary liability.

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 uses a blank indorsement and delivers it to the bank. Which of the following is true?

The bank can require payment from either Vexnet or Onyx since both companies have primary liability on the instrument.

If the instrument is presented to Vexnet for payment in a timely manner, and Vexnet does not pay, then Onyx would be responsible for the payment.

Onyx has no liability on the instrument since it was a blank indorsement.

Onyx has primary liability on the 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. The bank says that it will give Onyx the loan only if Laura indorses the note individually, along with Onyx as the company. In this case, Laura would be:

an accommodation maker and secondarily liable on the note.

an accommodation maker and primarily liable on the note.

an accommodation indorser and secondarily liable on the note.

an accommodation indorser and primarily liable on the note.

4. Assume that the promissory note from Vexnet to Onyx Advertising was payable on a date certain. However, the note was signed by Jonathon Shipperley, who did not have proper authority to sign the note. All other elements of a valid negotiable instrument were met. Which of the following is true?

Jonathan Shipperley would have personal liability on the note.

Onyx would have liability on the instrument if the company was negligent in letting Jonathan Shipperley sign the note.

Onyx would have liability on the note if it ratified Jonathan Shipperley’s signature.

All of these.

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. Further assume that the note was negotiated to Onyx as part of a sale of a used commercial printer that Onyx had, and that Onyx fraudulently induced Vexnet to issue the promissory note by stating that the printer had only been used for three hours and was in good working order. In reality, the printer had been used for 200 hours and did not work well. Vexnet does not want to pay on the note. Which of the following is true?

Vexnet would have to pay the note to an ordinary holder, but not to a holder in due course.

Vexnet would not have to pay to any holder because of the fraud in the inducement.

Fraud in the inducement is a universal defense.

Vexnet would have to pay the note to a holder in due course, but not to an ordinary holder.