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VII. ANSWERS TO PROBLEMS AND PROBLEM
CASES:
1. The instrument is the order
instrument
known as a draft. That it contains an "order" as
opposed to a "promise" differentiates it from the
promissory
note category and because it is
2. The promissory note would be preferable. Because it is negotiable, Sarah can transfer it
I
Chapter 31
-Negotiable Instruments
3. No. The court held that the instrument was not negotiable. The same result would be
reached
4. No. the note, having incorporated the terms of the purchase money mortgage, was
not
negotiable. The note, incorporating by reference the terms of the mortgage, did not
contain
5. No. Under UCC section 3-108 the instrument was payable on demand in any event since
no
6. No. The court held that the note was neither payable on demand nor a negotiable
instrument
7. No. A blank "pay to the order
of'
space on the promissory note did not invalidate the
note.
8. Yes. Revised UCC section 3-113 provides that an instrument "may be antedated
or
postdated."
And, under section 4-401, unless a customer has notified the bank of his or
her
31-8
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