John receives a 50,000$ check from Milton without the necessary consideration. John transfers the check to Paul. Paul acquired the check for value, in good faith, without any notice as to any flaws with the check, such as it being overdue, dishonored, in default, altered, and contains an unauthorized signature. Paul also obtained the check without notice of any claim of a property or possessory interest in it, without notice that any party has any defense against it or claim in recoupment to it, and nothing to call its authenticity into question. Paul then transfers the check to Joseph, who cannot meet the requirements to be a holder in due course. Milton now challenges Joseph's possession of the instrument on the grounds that Paul is a minor. 1- Does Paul meet the requirements to be a holder in due course of the instrument? Why or why not? 2- Which of the following is an example of a blank indorsement? a) John Smith, without recourse. b) Pay to the Order of Mary Johnson, John Smith. c) John Smith, for deposit only. d) John Smith. e) Where the check is not signed. 3- John indorses the check payable to his order and uses the words "without recourse." What is the effect of the words "without recourse" here? 4- Which of the following is an example of a restrictive indorsement? a) John Smith, without recourse. b) Pay to the Order of Mary Johnson, John Smith. c) Where the check is not signed. d) John Smith, for deposit only. e) John Smith. Page 4 of 3 5- Mention and explain the different types of checks, and is the type of the check effect the indorsement? 6- What if the check amount of money is 50,000$ and typed in letters on sixty thousand Dollar, is the check will be invalid? 7- Is the check consider a contract? If yes, what type of contract is it? 8- Is Milton argument about the effectiveness of the transfer of the check is a valid claim against joseph possession of the instrument? Why or why not?
Answer 1- As Paul accepted the check without having any doubt about its legitimacy he can be termed as a holder in due course is a person who accepts any instrument value for value without having any doubt about the legality of the instrument
Answer 2= The correct option is John Smith as a blank indorsement includes only the sign of the issuer.
Answer 3= "without recourse" means without any further liability so when it was mentioned on the instrument, it meant that John does not have any further liability about the instrument
Answer 4= The correct answer is Pay to the Order of Mary Johnson, John Smith. This is due to the fact that restrictive endorsement means that only the individuals whose names are mentioned on the instrument can cash the instrument.
Answer 6= If there is a mismatch between the written amount and the numeric amount in the check the written amount will be considered as correct. So in the given example, the check will be valid for the amount of sixty thousand Dollar
Answer 7- The check is not considered a contract. It is treated only as a negotiable instrument which is a promise to pay a certain sum to someone
John receives a 50,000$ check from Milton without the necessary consideration. John transfers the check to...
11. Ivy signs a check payable to Jon and gives it to him. Jon indorses the back of the check by signing his name, and transfers the check to Ked. To negotiate the check to Luis, Ked must a. write "Ked" on the back. b. write "pay to the order of Luis [signed] Ked" on the back. c. deliver the check to Luis. d. obtain Luis's signature on the back. 12. Rollo obtains a check payable to his order from...