Asked by
Ashraf Mahdi
on Dec 19, 2024
Verified
Yun writes an instrument that states it is "payable to Zho Ltd." In fact, "Zho Ltd." does not exist. The instrument is
A) negotiable.
B) nonnegotiable, because it does not state that it is payable to order.
C) nonnegotiable, because it is payable to a nonexistent organization.
D) nonnegotiable, because it cannot be transferred by indorsement.
Nonexistent Organization
An entity that is claimed or thought to exist but in reality does not.
Negotiable
Refers to something that can be discussed or altered, such as terms in a contract, or a financial instrument that can be transferred or sold.
Indorsement
A signature placed on an instrument for the purpose of transferring ownership rights in the instrument.
- Discern the effects of allocating payment mechanisms and involved parties on the exchangeability of financial instruments.
- Understand how the absence or presence of certain elements (like signature or specific payee) affects an instrument's negotiability.
Verified Answer
SR
Learning Objectives
- Discern the effects of allocating payment mechanisms and involved parties on the exchangeability of financial instruments.
- Understand how the absence or presence of certain elements (like signature or specific payee) affects an instrument's negotiability.