Asked by Bailey Goodman on May 07, 2024
Verified
Bill's car broke down on a dark, rainy night. Along came Andy in his service station's four-wheel drive truck with tools and supplies in the back. Bill didn't have any credit cards and only $3.25 cash, so Andy told him to write a check or an IOU. Neither Andy nor Bill had any paper, so Bill wrote on the cover of Andy's lunchbox: "If my car is fixed right by Andy Walcott, I will pay him $150. (Signed) Bill Boyd." Andy indorses the note and takes it to a commercial factor for negotiation. The factor refuses, saying it is non-negotiable because it:
A) is written on a lunchbox.
B) is conditional on satisfactory repair of the car.
C) mentions the existence of a contract to repair the car.
D) was written in a situation of duress.
Non-negotiable
A term describing an instrument or agreement that cannot be transferred or altered by endorsement or negotiation.
Satisfactory Repair
denotes the condition in which an item or property has been fixed or restored to a state deemed acceptable by a reasonable standard or agreement.
- Analyze the consequences of conditions, mentions of other agreements, and unclear payment times on the negotiability of instruments.
- Learn the specific provisions that determine when a promise or order is considered unconditional and due at a precise time.
Verified Answer
LR
Leandra RubillosMay 14, 2024
Final Answer :
B
Explanation :
The factor refuses because the note's obligation to pay is conditional on the satisfactory repair of the car, making it non-negotiable.
Learning Objectives
- Analyze the consequences of conditions, mentions of other agreements, and unclear payment times on the negotiability of instruments.
- Learn the specific provisions that determine when a promise or order is considered unconditional and due at a precise time.