NEGOTIN

Atty. James Keith Heffron

Instructions: Read each problem carefully and answer the questions neatly and legibly.
1. What are warranties?
a.
b.
c.
d.
e.

2. What are the warranties of the following, give a brief explanation for each:
The Maker
The Drawer
The Drawee
Irregular Indorsers
Regular Indorsers

b.
c.
d.
e.

3. a. What is presentment for payment?

How/When/Where is presentment for payment made?
What is the purpose of presentment for payment?
May the holder claim against the Maker of Drawee without making a presentment for payment? Explain.
When is presentment for payment dispensed with or excused?

4. a. M issues a note to P payable on December 15, 2016. P negotiates to A and A negotiates to B. On

December 10, 2016, B presents the note to M for payment. M pays. Is the note discharge? Explain.
b. What is payment in due course and what are its requisites.
b.
c.
d.
e.

5. a. What is Notice of Dishonor?

How is Notice of Dishonor made?
What is the purpose of Notice of Dishonor?
When is Notice of Dishonor dispensed with or excused?
What are the instances where Notice of Dishonor need not be given by the drawer? By the indorser?

6. a. What is discharge of negotiable instruments?

b. How are instruments discharged? Explain each
c. How are those secondarily liable discharged? Explain each
d. What is the legal effect of a discharge of those secondarily liable? Explain
7. When an instrument is materially altered what are its legal effects? Explain. Be able to cite a legal
case to support your explanation.
8. What is a Bill of Exchange and differentiate from a Promissory Note.
9. What is a foreign bill and differentiate from a domestic bill.
10. What is protest and what is its purpose? What are its requisites?
11. a. What is acceptance for honor?
b. What are the requisites for there to be a valid acceptance for honor?
c. What is the legal effect of acceptance for honor?
12. a. What is payment for honor?
b. What are the requisites for a valid payment for honor?
c. Is the consent of the holder needed for there to be a valid payment for honor?
d. If a payor for honor pays the instrument without complying with the requisites of a valid payment for honor
is the liability of the payee for honor discharged or not? Explain
13. What is a referee in case of need and differentiate from an accommodation party.
b.
c.
d.
e.

14. a. What is presentment for acceptance?

What are the requisites for a valid presentment for acceptance?
How/When/Where is presentment for acceptance made?
What is the purpose of presentment for acceptance?
When is presentment for aceptance excused?

15. a. What is acceptance?

b. How is acceptance made?
c. Is there a need for the drawee to make an acceptance every time before he can be charged with liability?
Explain.
d. What is a qualified acceptance?
e. What are the rights of parties when there is a qualified acceptance? Explain
f. What are the legal effects of a qualified acceptance? Explain
16. a. What is a bill in a set?
b. May the parts of a bill in a set negotiated separately? Explain
c. What are the legal effects if parts of a bill where in fact negotiated separately? Explain
17. a. Define Checks.
b. What is certification of checks and its legal effects? Explain
18. What is the Bouncing Checks Law?