Asked by Rachel Lopke on May 30, 2024
Verified
The transfer of a nonnegotiable promise or order operates as an assignment.
Nonnegotiable
Pertaining to an item or document that cannot be transferred or assigned to another party in exchange for money or goods.
Assignment
The transfer of rights, property, or obligations from one party to another, often used in contexts such as contracts, leases, and insurance policies.
- Understand the concept of negotiation and assignment in the context of negotiable instruments.
Verified Answer
MB
Manoo BhattJun 05, 2024
Final Answer :
True
Explanation :
According to the Uniform Commercial Code (UCC), the transfer of a nonnegotiable instrument operates as an assignment, meaning that the individual transferring the instrument is also transferring any rights or claims they have to the instrument. This differs from negotiable instruments, which can be transferred through endorsement and delivery, and operate as a negotiable instrument in the hands of the transferee.
Learning Objectives
- Understand the concept of negotiation and assignment in the context of negotiable instruments.
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