Multiple choice questions related to basic
1.In order to impose secondary liability, the following requirements must be met except that:
a.the instrument is properly presented for payment.
b.the instrument is dishonored.
c.the reason that the instrument was dishonored is justified.
d.timely notice of the dishonor is given to the party with secondary liability.
2.Betty Bongo, a real estate agent working for ABC Realty sells a home to Jason Biggs. Upon escrow closing, Betty signs the paperwork, "ABC Realty, by Betty Bogo, agent." Later it was determined that the home had Jason bought had a mold problem that should have been disclosed. Who is personally responsible on the instrument?
a.Betty Bongo, as agent for ABC Realty.
b.ABC realty.
c.Both Betty Bongo and ABC Realty.
d.All of these are correct.
e.None of these are correct.
3.If in the question above Betty Bongo did not show that her signature was made in a representative capacity and she cannot prove that the original parties did not intend her to be liable, who is liable?
a.ABC realty.
b.Visa.
c.Betty Bongo.
d.All of these are correct.
4.Which kind(s) of liability can be imposed only if a party has signed an instrument?
a.Warranty liability only.
b.Contract liability only.
c.Both contract liability and warranty liability.
d.Neither contract liability nor warranty.
5.What are the two general kinds of implied warranties for which warranty liability can be imposed in connection with a negotiable instrument?
a.Transfer and contract.
b.Signature and contract.
c.Transfer and secondary.
d.With recourse and without recourse.
e.Transfer and presentment.
6.When a person transfers a negotiable instrument, to whom does this transferor make transfer warranties?
a.Only parties to whom the transferor makes a written assertion in connection with the transfer.
b.For all transfers, to the immediate transferee only.
c.For all transfers, to the immediate transferee and all subsequent transferees.
d.For transfers for consideration, to the immediate transferee, and if the transfer is by indorsement, to all subsequent transferees as well.
7.If Royce wanted to know which universal defenses against the payment of a negotiable instrument that he could use, which of the following would he have available to him?
a.Infancy or minority.
b.Extreme duress.
c.Discharge in bankruptcy.
d.Material alteration.
e.All of these are correct.
8.If Royce comes to you and asks what type of personal defenses can he raise against enforcement of a negotiable instrument by an ordinary holder, which of the following would you say qualify as such?
a.Mental illness.
b.Illegality of a contract.
c.Undue influence.
d.Discharge of an instrument by payment or cancellation.
e.All of these are correct.