7 Questions
Which of the following is NOT a negotiable instrument under the law?
Trust receipts
Which law governs promissory notes and bills of exchange?
The Negotiable Instruments Law
Which of the following is a negotiable instrument held under the law?
Certificates of deposit
What is the requirement for a negotiable instrument to be valid?
It must have an unconditional promise or order to pay a sum certain in money
Which of the following is NOT governed by the Negotiable Instruments Law?
Letters of credit
What are treasury warrants?
Government warrants for the payment of money
Why are postal money orders not considered negotiable instruments?
The government is not engaged in commercial transactions when operating a postal money order system
Study Notes
- The most common forms of negotiable instruments are promissory notes, bills of exchange, and bank checks.
- The Negotiable Instruments Law deals with promissory notes and bills of exchange.
- Other instruments held negotiable under the law include certificates of deposit, bank notes, due bills, bonds, drafts, trade acceptances, and banker's acceptances.
- Commercial papers with limited negotiability include documents of title, letters of credit, trust receipts, certificates of stock, and pawn tickets.
- These papers are not governed by the Negotiable Instruments Law.
- Treasury warrants are government warrants for the payment of money.
- Postal money orders are orders for the payment of money subject to restrictions and limitations under postal laws and regulations.
- Postal money orders are not considered negotiable instruments.
- The government is not engaged in commercial transactions when operating a postal money order system.
- Negotiable instruments must have an unconditional promise or order to pay a sum certain in money.
Test your knowledge of negotiable instruments in this informative quiz! From promissory notes and bills of exchange to certificates of deposit and bank checks, we'll cover the basics of what constitutes a negotiable instrument under the law. You'll also learn about commercial papers that have limited negotiability and those that are not governed by the Negotiable Instruments Law. Plus, we'll touch on government warrants and postal money orders and why they differ from traditional negotiable instruments. Put your understanding to the test and see
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