5. Property and Commercial Law

Commercial Paper — Quiz

Test your understanding of commercial paper with 5 practice questions.

Practice Questions

Question 1

A negotiable instrument is transferred from one person to another. If the transferor intends to limit their liability for payment, which of the following endorsements should they use?

Question 2

Under the Uniform Commercial Code (UCC), for an instrument to be negotiable, it must contain an unconditional promise or order to pay. Which of the following clauses would render a promissory note non-negotiable?

Question 3

A check is issued by a drawer, payable to a payee. The payee endorses the check and transfers it to a third party. If the drawee bank wrongfully dishonors the check, who primarily bears the liability for payment to the holder?

Question 4

A promissory note is issued for $10,000$ with an interest rate of $8\%$\ per annum. The maker defaults on the payment. If the holder successfully sues the maker, what is the total amount the holder can recover, assuming the default occurred exactly one year after issuance and no payments were made?

Question 5

A check is made payable to 'Cash'. Which of the following statements regarding its negotiability and transfer is true?