Avril receives a payroll check from Business Solutions, Inc., and indorses it by signing her name on the back of the check. This is
a blank indorsement.
Wheels Inc. sells bicycles. Under most circumstances, Wheels will be presumed to have warranted that its title to the bikes is
good and valid
Alvin signs a promissory note payable to the order of Borrow & Spend Loan Company. The note states that it is payable “with interest at the legal rate.” This note is
not necessarily nonnegotiable.
Grande Floors, Inc., and Home Decro Stores enter into a contrat for a sale of carpeting. Grande Floors, a merchant who deals in goods of the kind sold, makes express warranties in connection with the sale. Under the UCC, at the time a contract is formed, an express warranty can be disclaimed or modified
by clear, conspicuous language called to the buyer’s attention
Edgar refuses to pay Delia $500 for the cost to repair Edgar’s washing machine and dryer, which Delia still possesses. Delia has a lien on the machines, which will terminate
if she voluntarily surrenders possession
To borrow the money to buy a car, Megan signs a note “payable to the order of Purchase Financing.” Olaf cosigns the note to guarantee the repayment of the loan. Olaf’s liability on this note is
primary
Countryside Bank provides Dhani with a standard mortgage with an unchanging rate of interest to buy a home. Payments on the loan remain the same for the duration of the mortgage. This is
a fixed-rate mortgage
Store Outfitters Company and Towncraft retail stores into a contract for a lease of cash registers. Store Outfitters assures Towncraft that is valid title to the goods. Under teh UCC, a warranty of title arises
automatically in most lease contracts
Barry draws a check payable to “Cash” and presents it to Dollars & Sense store for payment. This instrument is
a bearer instrument.
Ben signs a promissory note for $1,500 in favor of Community College. The note is undated but specifies that it is “payable one month after date.” This note is
not negotiable, because the maturity date cannot be determined from the face of the instrument.
Connie transfers a note by signing it and delivering it to Dana. Dana is
an indorsee.
Chuck is the maker of a $200,000 promissory note payable to Investors Corporation. Investors indorses the note to Equity Lenders, which in turn indorses it to Select Holdings LLC, which then indorses it to Global Bank, the present holder. Global Bank properly presents the note to Chuck for payment, but he dishonors it. With timely notice to the proper parties, Global Bank may collect payment on the note from
Investors, Equity Lenders, or Select Holdings.
Consumer Loans LLC signs an instrument payable to the order of Diana that states, “The maker of this note at the date of maturity, April 1, 2019, can extend the time of payment, but for no more than a reasonable time.” This instrument is
nonnegotiable because it is not payable within a definite time.
Camille signs an instrument in favor of Donald that states it is “subject to a certain agreement between Camille and Enzo.” This instrument is
not negotiable, because it is made subject to a separate agreement.
Dulcey agrees to cosign a promissory note for Excavation Equipment Inc. to buy a backhoe. The note is payable to Premier Bank. Dulcey is an accommodation
maker
Dental Clinic agent Emma is authorized to write checks on the clinic’s account in Finance Bank. Pharma Corporation is a clinic supplier. Emma writes a check on the clinic’s account “pay to the order of Pharma [signed] Emma,” indorses it in Pharma’s name, and deposits it in her own account at Third Bank. If the bank collects payment, the ultimate party most likely to suffer the loss is
Dental Clinic.
Darby writes a check to Education Loan Management, Inc., that is drawn on Darby’s account at Federal Bank. If the bank does not accept the check, liability for its amount is on
Darby.
Dhani signs a check “pay to the order of Eton” drawn on Dhani’s account in Fidelity Guaranty Bank and dates the check “May 1.” Eton presents the check to the bank for payment the following December 15. This is
a stale check.
Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First City Bank. First Bank may do all of the following except
ask Dalton what he would prefer.
Duke signs a note “payable to the order of Equity Bank.” Unless Duke has a valid defense against payment, his liability on this note is
primary.
Daisy signs a check “pay to the order of Ewan” drawn on Daisy’s account in Finance Bank. Graham forges Ewan’s indorsement. Finance Bank pays the check. Most likely
Finance Bank will have to recredit Daisy’s account.
Elmore pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is
a cashier’s check.
Emily writes and signs a check payable to “Five Star Cinema.” George, Five Star’s manager, indorses the check ‘For deposit only.” This is
a restrictive indorsement.
Ervin signs a check “pay to the order of Felicia” drawn on Ervin’s account in Garden Fields Bank. Based on a valid legal ground, Ervin later orders the bank not to pay the check, but the bank pays it over Ervin’s order. Subsequent checks written on Ervin’s account “bounce.” Most likely liable for the costs to Ervin is
Garden Fields Bank.
Edna is the payee of a bearer instrument- a promissory note in the amount of $10,000. Flem offers to irrigate Edna’s ranch next week in exchange for the note. She agrees and delivers the note to Flem. Flem is
not an HDC, because he did not yet give value for the instrument.
Erin draws a check payable to “Foodland” to buy groceries. With respect to Erin’s check, Foodland is
the payee.
Faye forges Greta’s signature on a check “payable to the order of Faye” drawn on Greta’s account in Hearthside Bank. Most likely, if the bank pays the check
the bank will have to recredit Greta’s account.
Gwen deposits $5,000 with Home State Bank on July 1, 2021. Home State Bank promises to repay Gwen the $5,000 plus 3 percent annual interest on July 1, 2026. Home State Bank issued to Gwen
a certificate of deposit.
Gwen signs a check payable to Hart and gives it to him. Hart indorses the back and transfers the check to Ingrid. To negotiate the check to Jaime, Ingrid must
deliver the check to Jaime
Harley signs a check payable to Pro Accountants, P.C., and gives it to Pro, leaving the amount blank but authorizing the firm to fill in the check for $10,000. Pro fills in $15,000 and negotiates the check to Valley Bank, to whom Pro owes $15,000. Valley Bank, an HDC, can enforce the check for
$15,000.
Homer can write checks on his account at InterCity Bank. Jemma steals the checks, forges Homer’s signature, and cashes the checks at InterCity. The bank is excused from any liability if, after receipt of the bank statement following the first forged check, Homer fails to report the forgery within
thirty days.
Home Products, Inc., warrants its goods to be free of defects. Ian issues an instrument to obtain a thermos from Home Products that leaks. With respect to payment on the instrument, Ian
has a personal defense against it.
Joni writes Keizer an uncertified check for $500 drawn on Joni’s account at Labor Employees Credit Union. Seven months later, Keizer presents the check for payment. The credit union pays the check in good faith without consulting Joni. The credit union
can charge Joni’s account for $500.
Jess receives a check from Kelly. Without Jess’s knowledge, Leo indorses it in his own name and deposits it in his account at Metro Bank. In Jess’s subsequent suit against the bank for the money, the court will most likely rule in favor of
Jess, because Leo’s signature is not authorized.
Kris transfers a note, on which Liu is the maker, to Mia, who takes it for value and in good faith. Mia knows that Kris breached the contract underlying the note, giving Liu a defense against payment. With respect to this note, Mia is
an ordinary holder.
Laura writes on a piece of paper, “I owe you $400,” signs it, and gives it to Max. This instrument is
not negotiable, because it does not include an express promise to pay.
Logan is Mining Corporation’s agent and is authorized to write checks on Mining’s account in Northwest Bank. Logan writes a check ‘pay to the order of Oceanside Resort.” Logan signs the check “Mining Corporation, by Logan, agent.” Northwest Bank dishonors the check. Liability extends to
Mining Corporation.
Nina obtains a check payable to her order from Oran. Nina signs the back and gives the check to Patricia. Patricia writes “Pay to Patricia” above Nina’s signature. When Patricia writes “Pay to Patricia” above Nina’s signature, the check becomes
an order instrument.
Oren signs an instrument payable to the order of Pay-Out Loans, Inc., “on or before” June 15. This instrument is
negotiable.
On the back of a check payable to Nero, he writes “Pay to Odell, without recourse” and signs it. This
relieves Nero of liability on the check
On Monday, Ellery deposits in her account at Fiscal Bank a local check for $500. Within one business day from the date of deposit, Ellery can withdraw
$500
On May 1, Mia signs a check that is payable to the order of Nicole and that is dated July 1. This check is
negotiable.
Orson signs a check “pay to the order of Painless Dental” drawn on Orson’s account in Quantum Bank. To impose liability on Orson if the bank dishonors the check, Painless Dental should present it for payment within
thirty days.
Resource Industries Inc.’s agent Polly is authorized to draw checks on the company’s account in Sterling Bank. The checks are preprinted with the company name. Polly writes a check “pay to the order of Don [signed] Polly.” Don presents the check for payment. If the bank dishonors it, liability extends to
Resource Industries
Rod negotiates a bearer instrument to Shauna by
delivery alone.
Shane issues a check drawn on Thrifty Bank to Farm Supply Store to pay for a rototiller. Later, Shane discovers a defect in the device and orders Thrifty to stop payment on the check. Shane does not renew the order, and the bank clears the check eight months later. The bank
need not recredit Shane’s account.
Theo signs a check payable to the order of Urban Bank, filling in the blanks for the amount with the figures “$100” and the words “One thousand and 00/100 dollars.” This check is payable in the amount of
$1,000.