(c) Under the Revised Article 3 of the UCC, there are two basic categories of negotiable instruments (i.e., promissory notes and drafts).
Garson then negotiated the check to Josephs in satisfaction of a $500 debt with the $500 balance paid to Garson in cash. Therefore, Josephs may collect the full $1,000 and win over the personal defense that Cobb has. A maker of a note will have a real defense against a holder in due course as a result of any of the following conditions except a.
Garson did not deliver the fuel oil, but filled in the amount of $1,000 on the check. He gave value for the full $1,000 since cash and taking the check for a previous debt are both value under negotiable instrument law.
Garson estimated the amount at $700, but told Cobb it would be no more than $900. Garson then negotiated the check to Josephs who is a holder in due course because he gave value for the negotiable instrument and took in good faith without notice of any problems.
Under the Negotiable Instruments Article of the UCC, an endorsement of an instrument “for deposit only” is an example of what type of endorsement?
Answer (d) is incorrect because a special endorsement refers to when the endorser indicates a specific person who needs to subsequently endorse it. Which of the following statements regarding negotiable instruments is not correct?
An example of this is the endorser putting in the words “without recourse” on the back of the instrument.
Answer (b) is incorrect because a qualified endorsement is one in which the endorser disclaims liability to pay the holder or any subsequent endorser for the instrument if it is later dishonored.
Answer (a) is incorrect because a blank endorsement is one that does not specify any endorsee.
(c) This is a very common type of restrictive endorsement.
A check is a draft drawn on a bank and payable on demand unless it is postdated. Under the Commercial Paper Article of the UCC, which of the following documents would be considered an order to pay?
A certificate of deposit is a promissory note issued by a bank.