Q&A Hero

Q: Which of the following written endorsements would be an example of an endorsement prohibiting further endorsement? A. Pay to Elaine, without recourse, [signed] John B. For collection only, [signed] John C. Pay to Elaine only, [signed] John D. Pay to Elaine, agent for John [signed] John

Q: Which of the following types of endorsements payment depends on the occurrence of an event? A. qualified endorsement B. conditional endorsement C. agency endorsement D. special endorsement

Q: An endorsement in which the endorser does not guarantee that an instrument will be accepted and paid by the drawer or maker is referred to as a ________. A. conditional endorsement B. restrictive endorsement C. qualified endorsement D. special endorsement

Q: A bearer paper can be converted to an order paper ________. A. by the use of a bill of lading B. by an endorsement to pay to the bearer C. by an endorsement in blank D. by the use of a special endorsement

Q: A bearer paper is different from an order paper in that a bearer paper ________. A. cannot be negotiated B. is negotiated by endorsement and delivery C. is negotiated by delivery alone D. is negotiated by endorsement alone

Q: The transfer of all or some of the rights under a contract is called a(n) ________. A. assignment B. allonge C. endorsement D. restrictive endorsement

Q: Common law differs from the Uniform Law on Bills of Exchange and Promissory Notes (ULB) in that the common law ________. A. does not allow external references for payment amount B. does not allow for variable interest rates C. allows nonmonetary modes of payments D. allows payments to be made in installments

Q: The Uniform Law on Bills of Exchange and Promissory Notes (ULB) differs from the Uniform Commercial Code in that the ULB ________. A. does not allow for variable interest rates B. allows payments to be made in installments C. allows nonmonetary modes of payments D. does not allow external references for payment amount

Q: Both the common law and the ULB specify that ________. A. the amount in the instrument can be paid in installments B. the sum paid for the negotiable instrument must be money C. the amount to be paid in an instrument is subject to variable interest rates D. the instrument need not be signed to be considered negotiable

Q: According to common law, which of the following is true of payment in a negotiable instrument? A. It has to be paid in the currency of the country in which it was issued. B. It cannot be made in installments. C. It should be ascertainable from the instrument itself. D. It can be paid in a nonmonetary mode of payment.

Q: The person who issues a bill of exchange is referred to as a ________. A. payee B. drawee C. drawer D. endorser

Q: Which of the following definitions describes a drawee to a bill of exchange? A. the issuer of a bill of exchange B. a person who signs a bill of exchange or note to lend his or her credit to another party C. the person ordered to pay a bill of exchange D. a person who receives an endorsed bill of exchange or note from an endorser

Q: Which of the following definitions describes an aval of a bill or a note? A. a person who has physical possession of a bill or note that is payable B. a person who signs a bill or note as a surety and comaker C. a person who endorses a bill or note as a guarantor of an endorsee D. a person who signs a bill or note to lend his or her credit to another party

Q: Which of the following definitions describes an accommodation party of a bill or a note? A. a person who receives an endorsed bill or note from an endorser B. a person who endorses a bill or note as a guarantor of an endorsee C. a person who signs a bill or note as a surety and comaker D. a person who signs a bill or note to lend his or her credit to another party

Q: Under common law, a person who acquires a bill or note for value, in good faith, and without notice that it is defective, overdue, or that any person has a claim to or defense against it is referred to as a(n) ________. A. holder in due course B. accommodation endorser C. aval D. acceptor

Q: Which of the following definitions describes an endorsee of a note? A. a person who endorses a bill or note as a guarantor B. a person to whom a bill or note is to be paid C. a person who receives an endorsed note from an endorser D. a payee who has endorsed and delivered a note to an endorser

Q: A drawee of a bill who, by signing the bill on its face, agrees to pay the bill when it is due is referred to as a(n) ________. A. accommodation party B. acceptor C. holder in due course D. holder

Q: A(n) ________ is a person who has physical possession of a bill or note that was drawn, issued, or endorsed to him or her, or to his or her order, or to the bearer, or in blank A. accommodation endorser B. holder C. assignor D. acceptor

Q: When a bank is the maker promising to repay money it has received, plus interest, the promissory note is called a ________. A. check B. letter of credit C. deed D. certificate of deposit

Q: A promissory note differs from a bill of exchange in that a promissory note ________. A. cannot have a fixed date for payment B. is not a written order to pay C. is a two-party instrument D. is always paid on demand

Q: Which of the following is true of checks? A. It is a two-party instrument. B. It is always payable on demand. C. It requires that the drawer is holding the drawees money. D. It necessitates that the seller has to be both the drawer and the payee.

Q: Which of the following terms refers to a bill of exchange on which the drawer and the payee are the same person? A. trade acceptance B. deed C. codicil D. certificate of deposit

Q: The bill of exchange that is payable at the time it is presented or at a stated time after presentment is known as a(n) ________. A. deed B. allonge C. sight bill D. time bill

Q: With regard to the form requirements for bills of exchange, the ULB is similar to the common law in that both require the instrument to ________. A. state the place where the instrument was drawn B. state the place where payable C. contain the term Bill of Exchange D. be in writing

Q: With regard to the form requirements for bills of exchange, the ULB differs from the common law in that the ULB requires the instrument to be ________. A. in writing B. payable to order C. payable to bearer D. dated

Q: Which of the following is true of a bill of exchange? A. It is not considered a negotiable instrument. B. It is also referred to as a draft. C. It is a two-party instrument. D. It contains a conditional order from the drawer that directs the drawee to pay a definite sum of money to a payee on demand or at a specified future date.

Q: In a draft transaction, if the drawee is a buyer of the drawer, then the draft is referred to as a ________. A. promissory note B. certificate of deposit C. trade acceptance D. check

Q: A bill involved in a draft transaction is considered a note ________. A. if the drawer owes money to the drawee B. if the drawee is drawers buyer C. if the drawee is a borrower of the drawer D. if the drawer has kept money with the drawee for safeguarding

Q: In a draft transaction, if the drawee is a bank, then the draft is referred to as a ________. A. promissory note B. check C. trade acceptance D. certificate of deposit

Q: A(n) ________ is a written, dated, and signed three-party instrument containing an unconditional order by a drawer that directs a drawee to pay a definite sum of money to a payee on demand or at a specified future date. A. codicil B. promissory note C. deed D. bill of exchange

Q: A ________ is an instrument issued by a warehouseman or carrier to a shipper that serves as a receipt for goods shipped, as evidence of the contract of carriage, and as a document of title for the goods. A. bill of lading B. deed C. letter of credit D. certificate of deposit

Q: Tolling is a type of countertrade which involves the exchange of a monetary debt for another form of debt, such as an equity share or an obligation to deliver products, goods, or services.

Q: Barter is an example of a countertrade.

Q: In a letter of credit transaction, an advising bank is entitled to reimbursement from the issuing bank if the documents it receives are in order.

Q: An advising bank assumes no liability for paying the letter of credit.

Q: A letter of credit is an instrument issued by a bank, or another person, at the request of an account party.

Q: The laws in the United States allow warranty liability on negotiable instruments.

Q: Parties with secondary liability to an instrument can only be sought after the instrument has been dishonored.

Q: Liability on the instrument for drawers, endorsers, and accommodation endorsers is primary.

Q: According to the fictitious payee rule, when the instrument is issued in the name of a fictitious payee, the person purporting to be that payee can make an effective endorsement.

Q: In most common law countries, the person best able to prevent the forgery from happening is held liable for a forged instrument.

Q: The ULB treats an endorsement prohibiting further endorsements as if it were a qualified endorsement.

Q: Under the ULB, only banks can become holders of an endorsement for collection.

Q: In a conditional endorsement, no subsequent holder has the right to enforce the payment against a conditional endorser until the condition is met.

Q: All restrictive endorsements prevent the further transfer or negotiation of a bill or note.

Q: An order bill is a bill or note that contains a special endorsement as its last endorsement.

Q: Negotiation is the transfer of a bill or note in such a way that the recipient becomes a holder.

Q: Any reference to some other agreements in a note would make it non-negotiable.

Q: To be negotiable, a bill or note must contain a promise by the drawer to make payment.

Q: Notes that are secured by personal property are referred to as collateral notes.

Q: The common law requires a note to contain the words promissory note.

Q: In a promissory note, the party who promises to pay is called the payee.

Q: In a trade acceptance, the drawer is ordered to pay a specified sum of money to the drawee.

Q: A bill of exchange that is payable at a definite future time is known as a sight bill.

Q: The common law does not require a bill of exchange to be dated.

Q: A bill of exchange is an unconditional written order.

Q: Differentiate between particular average and general average.

Q: What is the purpose of a maritime lien?

Q: Differentiate between a voyage charterparty and a time charterparty.

Q: What is a charterparty?

Q: Explain the Himalaya Clause.

Q: Differentiate between a straight bill of lading and an order bill of lading.

Q: Differentiate between a clean bill of lading and a claused bill of lading.

Q: What is the purpose of issuing a bill of lading?

Q: Differentiate between a conference line and an independent line.

Q: Explain the trade term free on board.

Q: A with average policy contains a ________ that provides for payment only if the loss exceeds a specified minimum amount. A. Himalaya Clause B. franchise clause C. constructive loss clause D. loss payee clause

Q: Which of the following terms refers to a contribution by those jointly involved in a maritime venture to make good the loss by one of them for his voluntary sacrifice of a part of the ship or cargo to save the residue of the property and the lives on board, or for the extraordinary expenses necessarily incurred for the benefit and safety of all? A. dead freight B. maritime lien C. general average D. particular average

Q: Which of the following terms refers to a loss to a ship or its cargo that is not to be shared in by contributions from all those interested, but is to be borne by the owner of the injured thing? A. dead freight B. maritime lien C. general average D. particular average

Q: Total loss of cargo is governed by a ________ in a maritime insurance policy. A. loss payable clause B. Himalaya Clause C. constructive loss clause D. loss payee clause

Q: Under the Brussels Convention, which of the following claims has the highest rank? A. Judicial costs and other expenses B. Salvage and general average C. Tort claims D. Ship mortgages

Q: The ________ establishes a hierarchy among lien claims. A. Brussels Convention B. Warsaw Convention C. Rome Convention D. Montreal Convention

Q: Which of the following is true of res in civil law countries? A. The res is seized without prior notice to the owner. B. The res is not regarded as something distinct from its owner. C. Maritime lien associated with a res requires separate possession. D. The res itself can be liable for the owners breach of contract.

Q: A ________ is the vessel or cargo to which a maritime lien attaches. A. mare liberum B. quaere C. situs D. res

Q: Which of the following is true of maritime liens? A. They attach to the res and travel with it. B. They require possession in both common law and civil law countries. C. In civil law countries, the owner is not essential to the existence of a lien against a ship. D. If a vessel is sold, the lien does not go with the ship, if the new owner is unaware of its existence.

Q: A ________ is a charge or claim against a vessel or its cargo. A. certiorari B. demurrage C. dead freight D. maritime lien

Q: Which of the following terms refers to a charge or claim against property that exists to satisfy some debt or obligation? A. lien B. demurrage C. certiorari D. dead freight

Q: A ________ is a contract to hire an entire ship for a particular duration. A. time charterparty B. voyage charterparty C. maritime lien D. codicil

Q: Which of the following terms refers to a charge made by a shipowner when a charterer keeps a ship idle for more than the agreed-upon number of lay days? A. claused bill of lading B. dead freight C. demurrage D. clean bill of lading

Q: Which of the following terms refers to a charge imposed on a charterer when a chartered ship has less than a full load? A. demurrage B. dead freight C. maritime lien D. straight bill of lading