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