Asked by Timothy McCormick on Jul 04, 2024
Verified
Brownies Inc. signs an instrument that promises to pay Chocolate Company a certain price, with interest, for a shipment of refined cocoa. By the terms of the instrument, it must be paid on its presentment, but no time for payment is specified. This instrument is
A) negotiable.
B) nonnegotiable, because it is only payable on presentment.
C) nonnegotiable, because no time for payment is specified.
D) nonnegotiable, because it is only payable on demand.
Presentment
The process of formally presenting a document, such as a check or bill of exchange, for acceptance or payment.
Negotiable
Capable of being transferred or sold with ease, often referring to financial instruments that can be transferred from one party to another.
Payment Time
The specific period within which a payment is due or expected to be made.
- Acquire knowledge on the notion of negotiability and the essential criteria for an instrument’s negotiability.
- Recognize the effects of specifying payment mediums and parties on the negotiability of instruments.
Verified Answer
CD
christopher doyleJul 08, 2024
Final Answer :
A
Explanation :
The instrument is negotiable because it contains an unconditional promise to pay a fixed amount of money, and the fact that it is payable on presentment or that no time for payment is specified does not affect its negotiability.
Learning Objectives
- Acquire knowledge on the notion of negotiability and the essential criteria for an instrument’s negotiability.
- Recognize the effects of specifying payment mediums and parties on the negotiability of instruments.
Related questions
On the Back of an Envelope, Phoebe Writes, I Promise ...
A Party Cannot Be a Holder in Due Course of ...
Once an Instrument Is Negotiable, It Remains Negotiable
Once Negotiable, an Instrument Remains Negotiable but a Restrictive Endorsement ...
An Oral Negotiable Instrument Is Permitted Under the UCC with ...