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PART V: NEGOTIABLE INSTRUMENTS.
Match the following:
a. The sender of a payment order.
b. A specialized form of draft; an order to pay money, drawn on a bank and payable on
demand. c. Defenses available against all holders.
d. Signature identifying an indorsee to be paid and making the instrument order
paper. e. A person who is in possession of an instrument with all necessary
indorsements.
f. Signature that specifies no indorsee and may consist of merely the signature of the indorser or her
authorized agent.
g. The person who executes a promissory note and who promises to pay it.
h. A written acknowledgment by a bank of the receipt of money that it promises to repay on demand or at
a stated future date, with interest at a stated rate; a specialized form of promise to pay money that is
given by a bank.
i. A party to whom a draft is directed, and who is requested to pay the amount of money ordered
therein; the bank on which a check is drawn.
j. The person who writes a check or draft; the person on whose account a draft is
drawn. k. A signature that attempts to limit the rights of the indorsee in some fashion.
l. A sender’s written, electronic, or oral instruction to a receiving bank to pay, or to cause another bank to
pay,
a fixed or determinable amount of money to a beneficiary.
m. The person in whose favor a promissory note or draft is made or drawn.
n. Defenses which are good against holders unless they have rights of holders in due course.
o. An instrument involving two parties, one of whom promises to pay to the order of the second a stated
sum of money either on demand or at a stated future date.
p. A paper, containing an indorsement, affixed to a negotiable instrument.
q. The transferee of a holder in due course succeeds to the rights of a holder in due course even
if the transferee does not qualify for holder in due course status.
r. The bank in which the payee or holder deposits a check for credit.
s. A bank, other than the depositary or payor bank, involved in the collection process.
t. Legal concept that makes written instruments freely transferable and therefore a readily accepted
form of payment in substitution for money.
1. real defenses
2. special indorsement
3. certificate of deposit
4. check
5. blank indorsement
6. restrictive indorsement
7. negotiability
POINTS: 1
10. holder
11. maker
12. allonge
13. payee
POINTS: 1
14. promissory note
15. payment order
16. shelter rule
ANSWER: q
17. personal defenses
18. originator
19. intermediary bank
20. depositary bank
