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Business Law- Negotiable Instrument MCQ with answers

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BUSI
NESSLAW-NEGOTI
ABLEI
NSTRUMENTS
1
.Thef
ol
l
owi
ngar
eessent
i
al
r
equi
si
t
esofanegot
i
abl
epr
omi
ssor
ynot
eexcept
a.mustbewr
i
t
t
enandsi
gnedbyt
hedr
awer
b.mustcont
ai
nanuncondi
t
i
onal
pr
omi
set
opayasum cer
t
ai
ni
nmoney
c.mustbepayabl
euponf
i
xeddet
er
mi
nabl
ef
ut
ur
et
i
me.
d.mustbepayabl
et
oor
derorbear
er
2.Whi
choft
hef
ol
l
owi
ngi
snotanessent
i
al
el
ementofabi
l
l
ofexchange?
a.mustbewr
i
t
t
enandsi
gnedbyt
hedr
awee
b.mustcont
ai
nanuncondi
t
i
onal
pr
omi
set
opayasum cer
t
ai
ni
nmoney
c.mustbepayabl
et
oor
derorbear
er
d.dr
aweemustbenamedt
her
ei
n
3.Thef
ol
l
owi
ngar
enegot
i
abl
eexcept
a.“
Payt
obear
erJoseCr
uzP1
0,
000upondemand”
,si
gnedbyAandaddr
essedt
oB
b.“
Payt
oJoseCr
uzorbear
erP1
0,
000upondemand”
,si
gnedbyAandaddr
essedt
oB
c.“
Iobl
i
gemysel
ft
opayPedr
oReyesoror
derP3,
000t
endaysaf
t
erdaysi
gnedbyM asmaker
.
d.“
Goodt
oLoror
derP5,
000Jul
y1
,2009s
i
gnedbyM asmaker
4.Whi
choft
hef
ol
l
owi
ngi
snegot
i
abl
e?
a.“Ipr
omi
set
opayJoseCr
uzoror
derP1
0,
000ordel
i
ver1cow 20daysaf
t
erdat
eatt
heopt
i
onoft
hehol
der
”
si
gnedbyM asmaker
b.“
Payt
oPedr
oReyesorbear
erP1
0,
000ordel
i
ver1cow on441
0att
heopt
i
onoft
hedr
awee”
,si
gnedbyAand
addr
essedt
oB
c.“
Payt
oPedr
oC.Cr
uzoror
derP5,
000outoff
undIdeposi
t
edwi
t
hyou”si
gnedbyAandaddr
essedt
oB
d.Ipr
omi
set
opayK.KHO oror
derP1
0,
000 i
n5i
nst
al
l
ment
s,f
i
r
s
ti
nst
al
l
mentAugust1
,2009andever
ymont
h
t
her
eaf
t
er
,si
gnedbyM asmaker
5.Thef
ol
l
owi
ngar
ef
unct
i
onsofnegot
i
abl
ei
nst
r
ument
;except
:
a.usedassubst
i
t
ut
ef
ormoney
b.medi
um ofcr
edi
tt
r
ansact
i
ons
c.medi
um ofexchangef
orcommer
ci
al
t
r
ansact
i
ons
d.noneoft
hem.
6.Whi
choft
hef
ol
l
owi
ngi
snoani
nci
denti
nt
hel
i
f
eofnegot
i
abl
ei
nst
r
ument
?
a,I
ssue
b.not
i
ceofdi
shonor
c.Pr
epar
at
i
on
d.Negot
i
at
i
on
7.Whi
choft
hef
ol
l
owi
ngi
snegot
i
abl
e?
a.Post
al
Moneyor
der
b.Cer
t
i
f
i
cat
eofst
ock
c.Tr
easur
ywar
r
ant
y
d.Noneoft
hem
8.Apr
omi
ssor
ynot
ei
spayabl
et
obear
erwhen:
a.I
ti
spayabl
et
oaper
sonnamedt
her
ei
norbear
er
b.t
heonl
yi
ndor
sementi
sbl
ank
c.t
henameofpayeedoesnotsuppor
tt
obet
henameofaper
son
d.al
l
oft
heabove
9.Thef
ol
l
owi
ngar
econsi
der
ednegot
i
at
i
onexcept
a.i
ssue
b.i
ndor
sementpl
usdel
i
ver
y
c.del
i
ver
y
d.noneoft
hem
1
0.Thi
si
ndor
sementconst
i
t
ut
est
hei
ndor
serasamer
eassi
gnoroft
het
i
t
l
eoft
hei
nst
r
ument
:
a.Speci
al
b.Bl
ank
c.qual
i
f
i
ed
d.r
est
r
i
ct
i
ve
1
1
.Thef
ol
l
owi
ngar
er
equi
si
t
esi
nor
dert
hataper
soncanbeconsi
der
edahol
deri
nduecour
se;except
a.t
hatt
hei
nst
r
umenti
scompl
et
eandr
egul
aruponi
t
sf
ace.
b.t
hei
nst
r
umenti
snotyetover
dueornonot
i
ceofdi
shonor
c.hol
derf
orval
ueandi
ngoodf
ai
t
h
d.noneoft
hem.
1
2.Whi
choft
hef
ol
l
owi
ngi
snotf
al
se?
a.ahol
derf
orval
uei
snotnecessar
i
l
yahol
deri
nduecour
se
b.onl
yper
sonwhosesi
gnat
ur
eappeari
nt
hei
nst
r
umentcanbehel
dl
i
abl
et
her
ei
n
c.f
or
ger
yi
sbot
hr
eal
andper
sonal
def
ense
d.anaccommodat
i
onpar
t
yi
sl
i
abl
eonl
yt
oahol
deri
nduecour
se
1
3.Real
def
ensesar
et
hoset
hatat
t
achedt
ot
hei
nst
r
umenti
t
sel
fandcanbesetupevenagai
nsthol
deri
nduecour
se.
Whi
choft
hef
ol
l
owi
ngi
snotconsi
der
edr
eal
def
ense?
a.f
r
audi
nf
act
um
b.f
or
ger
y
c.absenceorf
ai
l
ur
eofconsi
der
at
i
on
d.mi
nor
i
t
y
1
4.Theexi
st
enceoft
hepayeeandhi
st
hencapaci
t
yt
oi
ndor
sei
sawar
r
ant
yof
:
a.t
hemaker
b.accept
or
c.dr
awer
d.al
l
oft
hem
1
5.Whi
choft
hef
ol
l
owi
ngi
snotawar
r
ant
yofaqual
i
f
i
edi
ndor
ser
?
a.t
hei
nst
r
umenti
sgenui
ne
b.hehasagoodt
i
t
l
e
c.pr
i
orpar
t
i
eshavecapaci
t
yt
ocont
act
d.i
nst
r
umenti
sval
i
dandsubsi
st
i
ng
1
6.Not
i
ceofdi
shonori
snotr
equi
r
edt
obegi
venbyadr
awerwhen:
a.Thedr
awerandt
hedr
aweear
et
hesameper
son
b.t
hedr
aweehascount
er
mandedpayment
c.t
hedr
aweei
sf
i
ct
i
t
i
ous
d.al
l
oft
heabove
1
7.Whi
choft
hef
ol
l
owi
ngi
snotconsi
der
edmat
er
i
al
al
t
er
nat
i
on
a.changi
ngt
hedat
e
b.changi
ngt
heamount
c.changi
ngt
her
el
at
i
onoft
hepar
t
i
es
d.noneoft
hem
1
8.Anegot
i
abl
ei
nst
r
umenti
sdi
schar
gedby:
a.paymenti
nduecour
sebyoronbehal
foft
hepar
t
ypr
i
mar
i
l
yl
i
abl
e
b.paymenti
nduecour
sebyt
hepar
t
yaccommodat
ed
c.i
nt
ent
i
onal
cancel
l
at
i
ont
her
eofbyt
hehol
der
d.noneoft
hem
1
9.Whooft
hef
ol
l
owi
ngi
spar
t
ywi
t
hpr
i
mar
yl
i
abi
l
i
t
y?
a.Maker
b.I
ndor
ser
c.dr
awer
d.per
sonnegot
i
at
i
ngbymer
edel
i
ver
y
20.Achecki
snotpr
esent
edf
orpaymentwi
t
hi
nar
easonabl
el
engt
hoft
i
meaf
t
eri
ssuei
scal
l
ed
a.cer
t
i
f
i
ed
b.St
al
e
c.memor
andum
d.cr
ossed
21
.Si
gni
f
i
cat
i
onbyt
hedr
aweeofhi
sassentt
ocompl
ywi
t
ht
heor
deroft
hedr
aweri
s:
a.I
ndor
sement
caccept
ance
b.del
i
ver
y
d.pr
esent
mentf
oraccept
ance
22.Pr
esent
mentf
oraccept
ancei
sr
equi
r
edwhen
a.t
hebi
l
l
i
spayabl
eaf
t
ersi
ght
b.t
hebi
l
l
r
equi
r
esi
t
c.t
hebi
l
l
i
sdr
awnpayabl
eel
sewher
et
hant
her
esi
denceoft
hedr
awee
d.al
l
oft
hem
23.Pr
ot
esti
sr
equi
r
edwhent
hi
sbi
l
l
i
sdi
shonor
ed:
a.domest
i
c/
l
ocal
b.f
or
ei
gn
c.t
r
adeaccept
ance
d.al
l
oft
heabove
24.Thef
ol
l
owi
ngar
epr
omi
ssor
ynot
esexcept
:
a.duebi
l
l
b.bond
25.
Whi
choft
hef
ol
l
owi
ngi
sf
al
se?
a.t
heaccept
ori
spr
i
mar
i
l
yl
i
abl
e
b.t
hedr
aweri
ssecondar
i
l
yl
i
abl
e
c.t
hei
ssuei
snotnegot
i
at
i
on
c.cer
t
i
f
i
cat
eofdeposi
t
d.noneoft
hem
d.whent
hedr
aweranddr
aweear
et
hesameper
sont
hehol
derconsi
dert
hebi
l
l
wasanot
e
26.Ipr
omi
set
opayJoseReyesoror
derP1
0,
000t
endaysaf
t
ert
hedat
esi
gnedbyM asmaker
.Thenot
ei
sundat
ed.
Whi
choft
hef
ol
l
owi
ngi
scor
r
ect
?
a.t
henot
ei
snonnegot
i
abl
e
b.t
hepayeecanr
equi
r
epayment1
0daysaf
t
eri
ssue
c.t
hepayeecanr
equi
r
epaymentatanyt
i
me
d.t
hepayeecannotnegot
i
at
et
henot
e
27.Thenegot
i
abl
epr
omi
ssor
ynot
esi
gnedbyM asmakerf
orP1
0,
000i
spayabl
et
oJoseCr
uzorbear
eronMay1
0,
2009.M howeveri
ssuedt
henot
et
ot
hepayeeMay1
5,2009.I
nt
hi
scase:
a.Thei
nst
r
umenti
sconsi
der
ednonnegot
i
abl
ebecauset
hedat
eofi
s
suei
sl
at
ert
hant
hedat
eofpayment
.
b.Cr
uzcanaskf
orpaymentatanyt
i
me
c.Cr
uzcanr
equi
r
epayment
sonl
yonMay1
5,2009
d.Cr
uzcannotnegot
i
at
et
henot
e
28.“
Payt
oMar
i
aoror
derP20,
000upondemand”
,si
gnedbyAasdr
awerandaddr
essedt
oB.Mar
i
anegot
i
at
edt
he
bi
l
l
t
oC,Ct
oD,Est
ol
et
hebi
l
l
f
r
om Dandi
ndor
sedi
tt
oFbyf
or
gi
ngt
hesi
gnat
ur
eofD.Fi
nt
ur
ni
ndor
sedt
hebi
l
l
t
oG
&Gt
oH.Whi
choft
hef
ol
l
owi
ngi
sf
al
se?
a.al
l
i
ndor
ser
spr
i
ort
ot
hef
or
ger
yar
edi
schar
ged
b.t
hedr
aweri
sl
i
abl
et
oH
c.Fi
sl
i
abl
et
oH
d.For
ger
yi
sr
eal
def
ense
29.M i
st
hemakerofanot
epayabl
et
oJ.Cr
uzoror
derf
orP5,
000dueJul
y30,2009.Cr
uzbor
r
owedP2,
000f
r
om
Cpayabl
eJul
y31
,2009andpl
edgedt
henot
ebyi
ndor
si
ngi
tt
oC.Whi
choft
hef
ol
l
owi
ngi
scor
r
ect
?
a.apr
omi
ssor
ynot
ecannotbepl
edgedwi
t
houtt
heconsentoft
hemaker
b.OnJul
y30,2009Ccancol
l
ectf
r
om M onl
yP2,
000
c.onJul
y30,2009Ccancol
l
ectf
r
om M P5,
000
d.par
t
i
al
i
ndor
sementi
sal
l
owed
30.Ai
st
hedr
awerofabi
l
l
addr
ess
edt
oB,payabl
et
oCoror
der1
0daysaf
t
eraccept
ancef
orP8,
000.Cnegot
i
at
ed
t
hebi
l
lt
oD,t
oEandEt
oF.Thebi
l
lwasaccept
edbyBwhenpr
esent
edbyF.I
ft
hesi
gnat
ur
eofAi
sf
or
ge,whi
chof
t
hef
ol
l
owi
ngi
sf
al
se?
a.Bi
sr
equi
r
edt
opayFeveni
ft
hesi
gnat
ur
eofAi
saf
or
ger
y
b.Bi
snotr
equi
r
edt
opayFsi
ncehehast
hedef
enseoff
or
ger
y
c.For
ger
yi
sconsi
der
edar
eal
def
ense
d.I
fBdi
shonor
st
hebi
l
l
bynonpaymentFmaygi
vet
oanyi
ndor
se
31
.M i
st
hemakerofanot
e,payabl
et
oCoror
derf
orP1
0,
000.Cnegot
i
at
edt
henot
et
oD,Dt
oE,Et
oF,Ft
oGand
Gt
oH.M di
shonor
edt
henot
ewhenpr
esent
edbyH f
orpayment
.H gavenot
i
ceofdi
shonort
oF.Whi
choft
he
f
ol
l
owi
ngi
st
r
ue.
a.al
l
i
ndor
ser
spr
i
ort
oFar
edi
schar
ged
b.onl
yGi
sdi
schar
ged
c.Hi
sr
equi
r
edt
onot
i
f
yM
d.Fi
nt
ur
ncangi
venot
i
cet
oG
32.“Payt
oPedr
oReyesoror
derP20,
000t
endaysaf
t
ersi
ght
SI
GNED
ByAdr
awerasagentofB
To:B
Pedr
oReyesnegot
i
at
edt
hebi
l
lt
oC,C t
oD andD t
oE.Bdi
shonor
edt
hebi
l
lbynonpayment
.Egavenot
i
ceof
di
shonort
oal
l
pr
i
orpar
t
i
esexceptB.Whi
choft
hef
ol
l
owi
ngi
snotcor
r
ect
?
a.Thedr
aweri
snotl
i
abl
et
oE
b.Thedr
aweri
sl
i
abl
et
oEsi
ncehewasdul
ynot
i
f
i
edoft
hedi
shonor
c.i
fDpai
dE,Cbecomesl
i
abl
et
oD
d.t
hi
sbi
l
l
maybeconsi
der
edasanot
e
33.M si
gnedapr
omi
ssor
ynot
epayabl
et
oCoror
derf
orP5,
000t
endaysaf
t
erdat
e.Ci
ndor
sedt
henot
et
oD,Dt
oE
andEt
oF.F,wi
t
houtaut
hor
i
t
yf
r
om t
hepr
i
orpar
t
i
es,al
t
er
edt
heamountt
oP1
5,
000t
heni
ndor
sedt
henot
et
oG.
a.t
heunaut
hor
i
zedal
t
er
at
i
onr
ender
st
henot
evoi
d
b.Gcannotr
equi
r
eM t
opayanyt
hi
ng
c.Gcanr
equi
r
eM t
opayonl
yP5,
000i
fGi
sahol
deri
nduecour
se
d.Gcanr
equi
r
eM t
opayP25,
000i
fGi
sahol
deri
nduecour
se
34.Dr
awerA addr
essed abi
l
lt
oB f
orP 20,
000 payabl
et
o C oror
der20 daysaf
t
eraccept
ance.B madea
condi
t
i
onal
accept
ancei
nt
hi
scase:
a.t
hebi
l
l
becomesnonnegot
i
abl
e
b.i
ti
sst
i
l
l
negot
i
abl
enot
wi
t
hst
andi
ngt
hecondi
t
i
onal
accept
ance
c.t
hehol
dercannotr
ef
uset
ot
akeacondi
t
i
onal
accept
ance
d.Bi
sconsi
der
edaconst
r
uct
i
veaccept
or
35.
Mi
st
hemakerofanot
ef
orP30,
000payabl
et
oCorbear
er
.Cnegot
i
at
edt
henot
et
oD,Dt
oE,Et
oFandFt
oM.
Whi
chi
scor
r
ect
?
a.t
henot
ei
sdi
schar
ged
b.t
henot
edi
snotdi
schar
gedsi
ncet
her
ei
snopayment
c.M cannotr
ei
ssuedt
henot
e
d.Thei
ndor
ser
sar
enotdi
schaged
36.Dr
awerAaddr
essedabi
l
lt
oBpayabl
et
oCorbear
erf
orP60,
000upondemand.Cnegot
i
at
edt
henot
et
oD,D
t
oE,Et
oFandFt
oG.Uponpr
operpr
esent
ment
,Bpai
dt
hebi
l
l
.Whi
choft
hef
ol
l
owi
ngi
st
r
ue?
a.t
hebi
l
l
i
sdi
schar
ged
b.per
sonssecondar
i
l
yl
i
abl
ear
el
i
kewi
sedi
schar
ged
c.
t
hebi
l
l
i
snotr
equi
r
edt
obepr
esent
edf
oraccept
ance
d.al
l
oft
heabove
Suggest
edAnswer
s
1
.A
2.A
3.A
4.A
5.
D
6.
D
7.D
8.D
9D
1
0.C
1
1
.D
1
2.A
1
3.C
1
4.D
1
5.D
1
6.D
1
7.D
1
8.D
1
9.A
20.B
21
.C
22.D
23.B
24.D
25.C
26.B
27.B
28.B
29.C
30.B
31
.C
32.B
33.C
34.B
35.A
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