Asked by Ariel Kirkpatrick on Jun 22, 2024
Verified
Ahmed Cohen received a check for $5,000 for a used car he sold.The check did not specify to whom the check was payable.On the back of this check Ahmed wrote,in his handwriting,"Ahmed Cohen." This has the legal effect of:
A) making this instrument nonnegotiable.
B) making this instrument void.
C) making this instrument order paper.
D) making this instrument bearer paper.
Bearer Paper
A negotiable instrument or document of title that entitles the holder or bearer to the rights specified in the document, without needing to prove ownership.
Negotiable Instrument
A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time.
Order Paper
A negotiable instrument that is payable to a specific person or their order, allowing the transfer of ownership through endorsement.
- Understand the concept of negotiability of instruments and the effects of various indorsements.
- Distinguish between order paper and bearer paper and their negotiation processes.
Verified Answer
SV
Shubham VermaJun 28, 2024
Final Answer :
D
Explanation :
If an indorser merely signs his name and does not specify to whom the instrument is payable,he has indorsed the instrument in blank.An instrument indorsed in blank is payable to the bearer (person in possession of it)and from that act is "bearer paper."
Learning Objectives
- Understand the concept of negotiability of instruments and the effects of various indorsements.
- Distinguish between order paper and bearer paper and their negotiation processes.